© Reuters. Trevor Milton, founder and former-CEO of Nikola Corp., exits the Manhattan Federal Courthouse following an appearance in New York City, U.S., July 29, 2021. REUTERS/Eduardo Munoz/File Photo
By Jody Godoy
NEW YORK (Reuters) – Trevor Milton, the convicted founder of electric- and hydrogen-powered truck maker Nikola (NASDAQ:), is set to be sentenced on Monday after a jury in October 2022 found him guilty of lying to investors about the company’s technology.
Federal prosecutors in Manhattan said Milton misled investors by stating that Nikola had built a pickup from the “ground up,” had developed batteries he knew it was buying elsewhere, and had early success creating a “Nikola One” semi-truck he knew did not work.
The prosecutors last week urged U.S. District Judge Edgar Ramos to sentence Milton, 41, to 11 years in prison – in line with the sentence Theranos founder Elizabeth Holmes received last year after being found guilty of defrauding investors in her blood testing startup.
Milton’s lawyers said he should get probation, arguing that any misstatements resulted from his “deeply-held optimism” in his Phoenix-based company and that Holmes’ case was different because her lies put people at medical risk.
Ramos is set to decide Milton’s sentence at a hearing starting at 11 a.m. EST (1600 GMT) in federal court in Manhattan.
Milton made the statements about Nikola using social media and in podcast and television interviews as it joined the mounting number of tech and EV companies going public through special purpose acquisition vehicles, or SPACs.
Prosecutors said he was seeking to inflate the company’s stock price and his own net worth.
Milton was convicted on one count of securities fraud and two counts of wire fraud, and acquitted on an additional securities fraud count.
Nikola in 2021 agreed to pay $125 million to settle civil charges brought by the U.S. Securities and Exchange Commission.
The company’s shares trade for less than $1, down from a peak of higher than $60 in June 2020.