Nikola Motors to Pay $125 million settlementJanuary 3, 2022
The hydrogen truck maker has agreed to the SEC settlement resulting from its falsified promotional demo video.
Electric and fuel cell vehicle company Nikola Motors has agreed to pay the $125 million demanded by the Security and Exchange Commission (SEC) to settle the charges it faced for defrauding its investors with a promotional video.
The GM-backed truck maker admitted that the video was only of a prototype rolled down a hill.
The SEC stated that this falsified demo video was a lie from Nikola to its investors about the company’s products and their technical capabilities. The settlement has landed just over a year after the SEC’s investigation into Nikola initially launched. The investigation began following allegations that the electric and fuel cell vehicle maker had used its video to deceive its investors about its business practices.
The settlement is also almost five months after the SEC formally charged the company’s founder, and both CEO and executive chair at the time, Trevor Milton, of anti-fraud protection violations. The result of those charges was that Milton was indicted by a federal grand jury of three counts of criminal fraud.
The SEC accused the heavy duty hydrogen fuel truck company of arranging a public relations campaign full of exaggerations.
The SEC released a statement in which it accused Nikola of the orchestration of a broad-reaching public relations campaign for the purpose of boosting its stock price even before its products had arrived at the development phase.
“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,” said the SEC’s statement.
The SEC also accused the fuel cell vehicle company of having violated the federal securities laws’ anti-fraud and disclosure control provisions. The agency also expressed the issues it had with Milton’s continued activity on social media, where he was in direct contact with investors, allegedly sharing inaccurate information with them.
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