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The precipitous plunge of a motor vehicle magnate

| Dec 9, 2020 | Securities Litigation

Trevor Milton was on a roll.

After founding four relatively successful companies, selling one for nearly $16 million, the establishment of Nikola brought him fame along with his fortune. The company hyped heavy trucks operating on electricity or hydrogen. With the help of high-profile partners and vast numbers of pre-orders, he was able to finance a nationwide network of hydrogen fueling stations to keep Nikola’s vehicles operating.

In September, he signed with General Motors to build the zero-emission trucks.

Accusations Result in a Resignation

If the sky was the limit, that atmosphere had a ceiling that Milton crashed into. Three weeks after the landmark deal, he was out of his own company under the specter of federal investigations. A small investment firm based in New York claimed to have evidence of Milton’s “intricate fraud built on dozens of lies” in the form of phone calls, text messages, emails, and photographs.

In a Twitter statement before taking down his business account, Milton cited his resignation as a way to move the focus away from him and on the company. He promised to cheer on the company “from the sidelines” while defending himself against the allegations.

Milton may have left his lofty position, but he still retains a controlling interest in the company.

The allegations of misleading investors caught the attention of the U.S. Securities and Exchange Commission and the U.S. Department of Justice. They launched an investigation to see if the claims have any validity.