Electric TrucksFinanceNewsStartupsTop StoriesTrucking

Trevor Milton cast as greedy villain and betrayal victim in fraud trial

Nikola founder Trevor Milton “doubled down on his lies” after his chicanery involving a nonrunning prototype fuel cell truck was discovered, a federal prosecutor said in his opening statement of Milton’s securities and wire fraud trial Tuesday.

But Milton’s defense lawyers countered that he never intended to deceive anyone and that he committed no crimes. He is charged with two counts each of securities fraud and wire fraud.

“The government says that Trevor’s statements were significant to investors,” defense attorney Marc Mukasey told jurors. “But they were not material. The people who bought Nikola stock got exactly what they bargained for.”

The statement incorporated two points likely to be amplified during the four-to-five-week trial in the U.S. District Court for the Southern District of New York: How important is social media in influencing behavior and what responsibility do investors bear for knowing about their investments?

U.S District Judge Edgardo Ramos said last week he would allow tough questioning of Nikola investors expected to be called as prosecution witnesses. But he said defense attorneys could not blame them for their financial losses.

Nikola founder ‘lied to innocent investors’

“He lied to innocent investors, to make them buy, so he would profit,” said Nicolas Roos, assistant U.S. attorney and lead prosecutor. “In that, he was successful. He became a billionaire virtually overnight.”

Milton’s worth on paper approached $10 billion in the weeks after the electric truck company he founded in 2015 went public in June 2020. Forbes magazine ranked Milton at No. 249 on its Forbes 400 billionaires list in 2020 because of his enormous stake in the company. He has since sold hundreds of millions worth of shares and fallen off Forbes’ list.

Retail investors with accounts at brokerages like TD Ameritrade and on commission-free trading and investing app Robinhood chased Nikola’s share price above $90 before it began a steady decline. 

“He went on Twitter. He booked himself on TV and flooded the airwaves with falsehoods on podcasts,” Roos said. “Milton knew that the more people who wanted to invest, the richer he’d get.”

During an initial public offering, special purpose acquisition company VectoIQ sold shares in a blank check company that would become Nikola for $10 each with rights to a warrant to buy more at $11.50 a share.

‘Former employee blew the whistle’ on Trevor Milton

“The defendant continued to lie about the first truck that was towed up on a hill and then released. A former employee blew the whistle,” Roos said. “Now Milton could have ’fessed up, that he jumped the gun. But he doubled down on his lies.”

But Mukasey said Milton’s many posts and interviews talked about the future of Nikola, not the present, when he made claims about trucks the company planned to build and hydrogen it planned to produce. Two years after Milton resigned from the company, evidence is building of a startup gaining traction.

Milton had plenty of help and support for his bragging — in the beginning.

“This was not a fake it till you make it company.” Mukasey said. “All of the facts were posted on Nikola’s website, and on a government website specifically designed to protect investors. Yes [Milton] was concerned about the stock price. He was right — Nikola was attacked by short sellers.”

None more vociferously than Hindenburg Research, whose expose came two days after Nikola announced a manufacturing partnership with General Motors to build an electric pickup truck in exchange for an 11% stake in Nikola. Milton left Nikola 10 days after the report. GM ultimately walked away. The Badger never existed, another point prosecutors will make.

“Trevor’s team turned on him,” Mukasey said. “They had applauded, but now they turned.”

Trevor Milton fraud jury trial seated; opening statements next

5 things to know as Trevor Milton’s federal fraud trial begins

No plea deal offered by government nor sought by Trevor Milton

Click for more FreightWaves articles by Alan Adler.

2 Comments

  1. Of course, this is the prosecution’s turn to make their case, and things always look bad for the defense at this stage of the trial. Trevor’s team will get their opportunity to present their side of the story beginning later next week, or the week after. In the meantime, Nikola has had running, fully functional FCEVs for over two years now and just unveiled their latest working FCEV in Hamburg, Germany this week that is being tested and is projected to be manufactured and sold next year. And Nikola has manufactured and sold over 100 BEV trucks thus far and projects to sell 200-400 more by the end of the year. The point is, Nikola is doing everything Trevor said they would, as projected, or ahead of schedule. We also know the intent of the Hindenburg, as a short seller, was to destroy Trevor and Nikola to make money. One of the witnesses, Mr. Lackey, testified he made $600K thus far by doing so. Anyway, Trevor is getting his day in court. The jury will soon decide his fate. Nikola, in the meantime, is producing amazing vehicles that are changing the world of trucking.

    1. BTW, the Badger pickup truck does exist and has been on display at the Nikola HQ for almost 2 years now, and it is going to be shown to the jury. But, as mentioned, The Hindenburg’s attack forced Nikola to drop it to focus on Class 8 trucks only.

Leave a Reply

Your email address will not be published.

Alan Adler

Alan Adler is a Detroit-based award-winning journalist who worked for The Associated Press, the Detroit Free Press and most recently as Detroit Bureau Chief for Trucks.com. He also spent two decades in domestic and international media relations and executive communications with General Motors.