Trevor Milton, CEO of Nikola

Massimo Pinka | Reuters

Trevor Milton, the founder and former chairman and CEO of electric heavy-duty truck maker Nikola, was found guilty in federal court on Friday of three of four counts of fraud related to false statements he made to boost Nikola’s stock price.

Milton was charged with two counts of securities fraud and two counts of wire fraud, all related to statements he made about Nicola’s business while he was the company’s chairman and CEO. A jury found him guilty of one count of securities fraud and two counts of wire fraud.

Milton will be sentenced on January 27. He faces up to 25 years in prison if convicted on all four counts.

“Trevor Milton lied to Nicola’s investors — over and over and over again. This is fraud, plain and simple,” said Damien Williams, U.S. Attorney for the Southern District of New York. Williams said the case against Milton should “serve as a warning” to others who misrepresent investors.

“It will not end well,” he said.

Williams’ Manhattan office alleged that Milton lied about “nearly every aspect of the business” he founded in 2014 during his tenure at the company. Those lies, prosecutors said, were intended to induce investors to inflate Nikola’s stock price.

“On the backs of those innocent investors who were taken in by his lies, he became a billionaire virtually overnight,” Assistant US Attorney Nicholas Roos said in his entry application in September.

In June 2020, Nikola’s stock price briefly jumped to more than $90 per share, just days after it went public through a merger with a special-purpose buyout firm. For a short period, Nikola – a company with no profit – was more valuable than a century Ford motor.

This ambitious estimate did not last. Nicola’s shares fell sharply after Milton was forced to leave the company in September 2020 after the company’s board of directors discovered that some of allegations of fraud made by short seller Hindenburg Research had merit.

The US Department of Justice and the Securities and Exchange Commission launched an investigation months after Milton’s departure. In July 2021, a grand jury indicted Milton for three counts of fraud; a number four was added in June 2022.

Nicholas himself was not charged in this case. The SEC filed related civil charges against the company last year. Those charges were dropped in December after Nicola agreed to pay a fine of $125 million. Although Milton still owns shares in Nikola, the company has otherwise cut ties with him.