Trevor Milton, the founder of new energy vehicle manufacturer, Nikola (NASDAQ:NKLA), faces sentencing on Monday following a jury's conviction in October 2022. He was found guilty of deceiving investors about the company's technological advancements.
Prosecutors in Manhattan alleged that Milton misled investors by falsely claiming Nikola had constructed a pickup from scratch, developed batteries it was actually purchasing from external sources, and boasted early achievements with a non-functional "Nikola One" semi-truck.
Federal prosecutors urged U.S. District Judge Edgar Ramos last week to impose an 11-year prison sentence on 41-year-old Trevor Milton, aligning it with the penalty received by Theranos founder Elizabeth Holmes the previous year for defrauding investors in her blood testing startup.
Milton's legal team contended that he should be granted probation, asserting that any misleading statements arose from his strong belief in the potential of his Phoenix-based company. They argued that Holmes' situation differed as her false claims posed a direct risk to people's health.
Ramos is scheduled to determine Milton's sentence during a hearing commencing at 11 a.m. EST in the federal court located in Manhattan.
Milton made the statements about Nikola through social media channels, podcasts, and television appearances, coinciding with the company's entry into the expanding realm of tech and electric vehicle firms going public via special purpose acquisition vehicles (SPACs).
Prosecutors alleged that his intent was to artificially boost both the company's stock value and his personal wealth.
Milton was found guilty on one count of securities fraud and two counts of wire fraud, while being acquitted on an additional securities fraud charge.
In 2021, Nikola reached a settlement agreement to pay $125 million to resolve civil charges leveled against it by the U.S. Securities and Exchange Commission.
Shares of NKLA are up 2.12% in morning trading on Monday.