Massimo Pinca | Reuters
Prosecutors have indicted the billionaire, who resigned as president in September, with two counts of securities fraud, including misrepresentation about the company and wire fraud.
“Milton’s scheme targeted non-professional individual investors – the so-called retail investors – by making false and misleading statements directly to the investing public through social media and television, print and podcast interviews,” said prosecutors in the 49-page indictment.
Nikola shares are down more than 9% on pre-market trading to less than $ 13 per share.
Nicholas Biase, spokesperson for the US attorney’s office, said Milton had surrendered to authorities and is expected to appear in court later today in New York.
Milton, who was the largest shareholder in the company, held around $ 8.5 billion in Nikola shares at the peak of the company’s value.
Prosecutors said Milton “was motivated to engage in the fraudulent scheme in order to enrich himself and elevate his entrepreneurial stature.”
A Milton spokesperson did not immediately comment on the indictment.
Nikola said in an emailed statement that he “has cooperated with the government throughout its investigation.” The company stressed that the allegations were against Milton and not the company itself.
“We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities,” the company said.
Numerous allegations of false and misleading statements were first discovered by short seller Hindenburg Research in September.
Following an internal investigation, Nikola said in February that he discovered that Milton made several incorrect statements from 2016 during the company’s IPO last year, which misled investors.
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