SEC charges former Nikola CEO with securities fraud

On July 29th, the Securities and Exchange Commission (the “SEC”) announced charges against Trevor R. Milton, the founder, former CEO and former executive chairman of Nikola Corporation, for repeatedly disseminating false and misleading information – typically by speaking directly to investors through social media – about Nikola’s products and technological accomplishments.

The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that Milton founded Nikola in 2015 with the primary goal of manufacturing trucks that run on alternative fuels with low or zero emissions and building an alternative fuel station infrastructure to support those vehicles. 

Milton allegedly helped Nikola raise more than $1 billion in private offerings and go public through a business combination conducted by a special purpose acquisition company (SPAC). 

According to the SEC’s complaint, during that time and after Nikola was publicly traded, Milton acted as Nikola’s primary spokesperson appearing regularly on national media and communicating directly with investors through social media. 

Milton allegedly encouraged investors to follow him on social media to get “accurate information” about the company “faster than anywhere else.”  Instead, however, Milton allegedly used his extensive media platform to repeatedly mislead investors about, among other things, Nikola’s technological advancements, products, in-house production capabilities, and commercial achievements.

Basically, the SEC claims that Milton repeatedly lied to investors about what Nikola and its products actually did or could do without any regard for federal securities laws and ultimately reaped tens of millions of dollars in personal benefits as a result of his materially false and misleading statements.

Read: Social Media and Being Publicly Traded

The SEC’s complaint charges Milton with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.  The complaint seeks a permanent injunction, a conduct-based injunction, an officer and director bar, disgorgement with prejudgment interest, and civil penalties. 

Milton’s troubles don’t end with the SEC. The former Nikola CEO was also criminally charged by a federal grand jury. The indictment by the U.S. attorney’s office in Manhattan charged the former Nikola CEO with two counts of securities fraud and one count of wire fraud.

According to the DOJ press release, tens of thousands of retail investors purchased Nikola’s stock between March 2020 and September 2020 based on the false and misleading statements being made by Milton on social media regarding Nikola’s products and capabilities. During this same period, certain institutional investors who had access to more complete information regarding Nikola’s products and technology, including some who received Nikola shares as part of the SPAC transaction, were able to sell their stock for a significant profit.

The value of Nikola’s stock plummeted after the fact that certain of Milton’s statements had been false and misleading was disclosed to the market in or around September 2020 (specifically, in a report by Hindenburg Research published on September 10, 2020).  As a result, many Nikola stockholders, including the retail investors who were the target of Milton’s scheme, suffered significant financial losses, in some cases totaling in the tens or hundreds of thousands of dollars and compromising their financial security or retirement savings. 


For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email [email protected] or visit  This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

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