Trevor Milton, founder of Nikola Corp., exits courtroom in New York, US, on Monday, Sept. 12, 2022.
Stephen Yang | Bloomberg | Getty Images
Nikola Founder Trevor Milton is ready to be sentenced Monday in a New York courtroom on three charges associated to defrauding buyers of the embattled electric- and hydrogen-powered truck maker.
Milton was discovered responsible in October 2022 on two counts of wire fraud and one rely of securities fraud. He faces up to 60 years in jail. However, prosecutors in New York final week beneficial a sentence of 11 years imprisonment.
Milton grew to become an overnight billionaire when he took Nikola public by means of a take care of a particular objective acquisition firm in June 2020. The firm was shortly thought of to be one of many most-promising EV startups – valued at its peak at greater than $30 billion – till allegations concerning false and misleading statements had been uncovered by short-seller Hindenburg Research.
Prosecutors on Tuesday in contrast Milton to disgraced Theranos founder Elizabeth Holmes, who was sentenced to more than 11 years in jail final yr for defrauding buyers in her blood testing startup.
“Just as Holmes lied about Theranos-manufactured blood analyzers, Milton lied concerning the operability of the Nikola One semitruck,” prosecutors wrote to U.S. District Judge Edgardo Ramos, who will resolve Milton’s sentencing.
Milton has tried to distinguish himself from Holmes, whose firm was personal. He argues “that Nikola remains to be an actual enterprise, whereas Theranos will not be,” in accordance to courtroom paperwork.
Milton, who was the corporate’s largest shareholder, stepped down as govt chairman of Nikola in September 2020. He did so amid an inner probe after the Hindenburg report, which characterised the corporate as a home of playing cards constructed by Milton.
Since Milton’s resignation, shares of Nikola have crated and the corporate has failed to retain executives. Nikola Chairman Stephen Girsky, whose SPAC introduced the corporate public, was named CEO in August.
Shares of Nikola have not too long ago traded beneath $1, with a market worth of about $327 million.
Nikola was among the many first closely publicized firms to go public by means of a SPAC. It impressed lots of of different startups to do the identical earlier than the Securities and Exchange Commission cracked down on the practice.
SPACs are publicly traded firms that do not have any actual property apart from money. They are fashioned as funding autos with the only real objective of elevating funds after which discovering and merging with a privately held firm.
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