CRIMINAL CAPITALI$M

Electric truck startup Nikola settles fraud charges for $125 million

Nikola is a Phoenix-based startup that aims to produce electric- and hydrogen-powered trucks. File Photo courtesy Nikola Corp.

Dec. 21 (UPI) -- Electric truck startup Nikola announced on Tuesday that it's agreed to pay $125 million to settle federal charges that it defrauded investors.

Regulators said Nikola misled investors about products, technical advancements and commercial prospects.

In July, federal prosecutors charged Nikola founder and former CEO Trevor Milton with securities and wire fraud and making false statements about the company.

The accusations say Milton embarked on "a public relations campaign aimed at inflating and maintaining Nikola's stock price" before it had even produced a single vehicle.

The statements falsely gave investors the impression that Nikola had reached certain product and technological milestones, authorities said.

Officials said Nikola further misled investors by "misrepresenting or omitting material facts."

"Nikola Corporation is responsible both for Milton's allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company's business and technology," Gurbir Grewal, director of the Securities and Exchange Commission's enforcement division, said in a statement.

Under the terms of the deal, Nikola doesn't acknowledge or deny the accusations of fraud. The Phoenix-based company said it will attempt to recoup some of the penalty from Milton.

"We are pleased to bring this chapter to a close," Nikola said in a statement.

Nikola will pay the $125 million fine in five installments over two years.