Nikola Corporation to Pay $125 Million to Resolve Fraud Charges

Washington D.C., Dec. 21, 2021 —

The Securities and Exchange Commission today announced that Nikola Corporation, a publicly traded company created through a special purpose acquisition company transaction, has agreed to pay $125 million to settle charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects. The settlement follows the SEC’s litigated action filed earlier this year against Trevor Milton, the company’s founder and former Chief Executive Officer and Executive Chairman.

According to the SEC’s order, before Nikola had produced a single commercial product, Milton embarked on a public relations campaign aimed at inflating and maintaining Nikola’s stock price. Milton’s statements in tweets and media appearances falsely gave investors the impression that Nikola had reached certain product and technological milestones. The order finds that Milton misled investors about Nikola’s technological advancements, in-house production capabilities, hydrogen production, truck reservations and orders, and financial outlook. The order also finds that Nikola further misled investors by misrepresenting or omitting material facts about the refueling time of its prototype vehicles, the status of its headquarters’ hydrogen station, the anticipated cost and sources of electricity for its planned hydrogen production, and the economic risks and benefits associated with its contemplated partnership with a leading auto manufacturer.

“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.”

The Commission’s order finds that Nikola violated the antifraud and disclosure control provisions of the federal securities laws. Without admitting or denying the Commission’s findings, Nikola agreed to cease and desist from future violations of the charged provisions, to certain voluntary undertakings, and to pay a $125 million penalty. Nikola also agreed to continue cooperating with the Commission’s ongoing litigation and investigation. The order also establishes a Fair Fund to return the penalty proceeds to victim investors.

Rebecca Fike, Sarah Mallett, and Ty Martinez of the SEC’s Fort Worth Regional Office conducted the investigation, which is ongoing, under the supervision of Scott Mascianica and Eric Werner. Nikolay Vydashenko and Keefe Bernstein provided trial assistance under B. David Fraser’s supervision. The SEC appreciates the assistance from the United States Attorney’s Office for the Southern District of New York and the U.S. Postal Inspection Service.

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