Truck manufacturer Nikola has agreed to a $125 million settlement with the Securities and Exchange Commission over charges it defrauded investors, AdvisorNews reports.
Nikola, a publicly traded company created through a special purpose acquisition company transaction, allegedly misled investors about its products, technical advancements, and financial outlook. Nicola settled the case after the SEC brought fraud charges against the corporation’s founder and former chief executive, Trevor Milton.
The SEC alleged that Milton initiated a public relations campaign through Twitter and media appearances that was meant to inflate the stock price of Nikola before the company had produced any commercial products. The commission said Milton gave investors false impressions about Nikola’s technological and production capabilities and its business prospects.
“As the order finds, Nikola Corporation is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides.”
Nikola was found by the SEC to have violated the antifraud and disclosure control provisions of the federal securities laws. The company did not admit or deny the findings, but did consent to the $125 million penalty while also agreeing to cease and desist from future violations of those provisions. Nikola also agreed to continue its cooperation with the SEC’s ongoing litigation and investigation. In addition, the company agreed to establish a Fair Fund to return proceeds to investors who were victimized in the case.
Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact us at (312) 291-4600 or through our online contact form for a free consultation.