The founder of a popular US electric truck startup has been sentenced to four years in prison.
Trevor Milton, who headed the Nikola Corporation, was convicted of fraud last year after a jury found he repeatedly lied about the company.
His claims helped boost the firm’s stock price, which soared to incredible heights during the pandemic before collapsing amid claims of fraud.
The 41-year-old cried at the sentencing hearing, claiming he had meant well.
” moment’s judgment should be a warning to incipiency authors and CEOs far and wide that’ fake it’til you make it’ is no reason for fraud, and if you mislead your investors, you will pay a heavy price,” said Damian Williams. , United States Attorney for the Southern District of New York.
Milton, who didn’t have a degree, founded Nikola around 2015 and pitched it as a potential competitor to Tesla.
It claimed to be developing electric and water-powered trucks. In June 2020, Nikola became a public company following a merger with another firm.
Within weeks, it was valued at more than $20 billion, despite never having delivered a single car, and soon announced partnerships with companies such as General Motors.
But the hype died down as questions grew about the veracity of Milton’s claims. A well-publicized report by short-selling firm Hindenburg Research added to the growing concern.
An investigation by federal prosecutors found that Milton “made false statements about nearly every aspect of Never’s business” and specifically targeted lay investors.
” For numerous months, you used your considerable social media chops to promote your company in false ways,” Judge Edgardo Ramos said.
“What you said time and again in various media was wrong,” the judge added.
In one example, a promotional video that appeared to show a self-propelled truck actually rolling downhill.
The ruling comes two years after Nicolas paid $125 million to settle fraud claims brought by financial regulators.
That sentence carries far less prison time than Milton could have received, given the hundreds of millions in damages described by prosecutors.
He was also sentenced to three years of supervised release, forfeiture of property and a fine of $1 million.
He is the last American entrepreneur who ended up behind bars.
Theranos founder Elizabeth Holmes is also currently serving time in prison, and FTX CEO Sam Bankman-Fried is awaiting sentencing.
