US SEC to dismiss case against former Nikola CEO

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By Mrinmay Dey

(Reuters) -The U.S. Securities and Exchange Commission moved on Thursday to dismiss its case againt Trevor Milton, the founder and former CEO of Nikola, a company that sought to make electric and hydrogen-powered trucks.

In the case, filed in 2021, U.S. prosecutors accused Milton of falsely claiming that Nikola had built an electric- and hydrogen-powered pickup from scratch and developed batteries in-house while knowingly sourcing them externally.

In a document filed with the United States District Court for the Southern District of New York on Thursday, the SEC stated that it believes dismissing the case is appropriate.

Milton, who received a pardon from U.S. President Donald Trump this year, also waived his right to seek legal costs and released all claims against the agency, the document showed.

Nikola’s stock plummeted after Hindenburg Research, a former high-profile short-seller, targeted the company in 2020, accusing it of deceiving investors about its technological advancements.

It challenged a video Nikola produced showing its electric truck cruising at high speed, when in fact the vehicle was rolled down a hill.

Milton, who founded the Phoenix-based company in 2014, resigned shortly after the report. Two years later, he was convicted in October 2022 on one count of securities fraud and two counts of wire fraud.

In 2023, a jury convicted Milton of misleading investors about the company’s technology, resulting in a four-year prison sentence.

In February, Nikola became the latest electric vehicle maker to falter, filing for Chapter 11 bankruptcy and announcing plans to sell its assets.

(Reporting by Mrinmay Dey in Bengaluru; Editing by Edwina Gibbs)