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Home / Insurance / Nikola agrees to pay $ 125 million to settle SEC accusations of deceiving investors

Nikola agrees to pay $ 125 million to settle SEC accusations of deceiving investors



(Reuters) – Nikola Corp. has agreed to pay $ 125 million to settle civil lawsuits alleging that they deceived investors by misleading them about its products, technological advances and commercial prospects, the US Securities and Exchange Commission said on Tuesday.

The Securities and Exchange Commission accused the electric carmaker to violate US securities laws with a number of misleading statements from March to September 2020 about its own production capacity, reservation book and economic outlook.

The settlement follows civil and criminal charges brought in July against Nicolas founder Trevor Milton for using social media to repeatedly mislead investors about the company's technology and capabilities, and reaped "tens of millions of dollars" as a result of his misconduct. Milton is fighting these allegations in court after losing a bid to dismiss or move the case.

Milton's misleading statements aimed at inflating stock prices began even before Nikola had produced a "single commercial product or had any sales revenue". of trucks or hydrogen fuel, "said the SEC order.

Nikola, who did not acknowledge or deny the SEC's findings, has agreed to cooperate with ongoing litigation and investigations, the SEC said. The company revealed earlier expectations of the hefty penalty in November.

Nikola "is responsible both for Milton's alleged misleading statements and for other alleged frauds, all of which incorrectly portrayed the true state of the company's operations and technology," Gurbir Grewal, SEC's CEO, said in a statement.

Nikola said in a statement that they will continue to implement their strategy and expand their manufacturing network. The company is seeking compensation from Milton for "costs and damages associated with investigations by regulators and regulators," it said. the traditional IPO process.

This month, the SEC President said that the agency was considering tightening the rules on how insurers, boards and sponsors of SPAC structure fees, issue forecasts and reveal conflicts.

The plans are part of a broader crackdown on the SPAC sector this year. The SEC has also told top auditors to change their accounting practices, launching a broad enforcement investigation of Wall Street banks involved in the deal.

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