Convicted founder Nikola Milton owes electric truck maker $168 million, judge finds By Reuters

By Jonathan Stempel

(Reuters) – A U.S. judge said Trevor Milton, the founder of Nikola (NASDAQ: ) who was sentenced to four years in prison after being convicted of fraud, must pay the electric truck maker $167.7 million for that he made false and misleading statements about the company. the public.

In a ruling Monday, U.S. District Judge Diane Humetewa in Phoenix upheld a November 2023 ruling by a split arbitration panel in Nikola’s favor.

Humetewa said the group acted within its authority in interpreting a separation agreement Milton entered into when he stepped down as Nikola chief executive in September 2020.

The panel found that Milton is required to pay $121.25 million, or 97 percent, of Nikola’s $125 million fine from the settlement of a US Securities and Exchange Commission civil fraud case and cover nearly $46.5 million in fees and legal expenses.

Milton, 42, argued the award was excessive and amounted to “harsh justice” because the panel ignored the “relative culpability” of other Nikola executives, directors and employees.

But the judge said the panel’s analysis was plausible, including its attribution of 3 percent to the Phoenix company for failing to prevent Milton from misleading investors.

Attorneys for Milton did not immediately respond to requests for comment Tuesday. Nikola’s attorneys had no immediate comment.

Manhattan jurors convicted Milton in October 2022 of two counts of wire fraud and one count of securities fraud after prosecutors said he lied to investors about Nikola’s technology.

Prosecutors said Milton’s inappropriate statements included Nikola building a pickup truck “from scratch,” developing batteries he knew he was buying elsewhere, and making progress on creating a “Nikola One” semi truck that he he knew it wasn’t working.

Milton is free on bail while he appeals his December 2023 conviction and sentence.

The case is Nikola Corp v. Milton, U.S. District Court, District of Arizona, no. 23-02635.