Diverging portraits of
emerged Tuesday at the start of his securities-fraud trial, as lawyers clashed over whether the former executive was a fraudster who lied about his company’s electric-truck technology, or a visionary who promoted its innovative products.
Mr. Milton, 40 years old, is charged with two counts of securities fraud and two more for wire fraud. He resigned from the company in 2020 and was indicted last year.
A federal prosecutor told jurors in a Manhattan courtroom that Mr. Milton lied to investors about Nikola’s progress in building a revolutionary fleet of environmentally friendly trucks. The founder told the investing public that Nikola’s trucks were functional when in reality they didn’t work, and represented that the company had binding orders it didn’t really possess, Assistant U.S. Attorney Nicolas Roos said in his opening statement.
During one Nikola truck unveiling, Mr. Milton said the vehicle ran on batteries and hydrogen, but it actually was missing gears, motors, had no hydrogen power and was plugged into a wall to make the lights come on, Mr. Roos said. “It couldn’t drive,” he told jurors.
Once Nikola went public, Mr. Roos said, Mr. Milton took his fraudulent pitch to places where ordinary investors were listening: podcasts, television and social media.
“On the backs of those innocent investors, taken in by his lies, he became a billionaire basically overnight,” Mr. Roos said.
Marc Mukasey, a lawyer for Mr. Milton, said his client hadn’t intended to deceive anyone. Prosecutors were cherry picking sentences and playing word games with Mr. Milton’s public statements, he said.
“This is a prosecution by distortion,” Mr. Mukasey told jurors. “A distortion of Trevor Milton’s words, a distortion of Trevor Milton’s meaning, a distortion of Trevor Milton’s intentions.”
Information about Nikola was readily available to investors on its website and in securities filings, Mr. Mukasey said. While Mr. Milton wasn’t perfect with words and didn’t speak like an engineer, he was speaking honestly about the company’s future business plans, Mr. Mukasey said.
The defense lawyer said Mr. Milton’s tweets and television interviews were part of the company’s marketing plan. “A trial about tweets,” he said. ”I mean, really?”
Mr. Milton looked on intently, his chin cupped in his palm.
Nikola wasn’t charged in the case and has said it cooperated with government investigations. It settled a civil investigation by the Securities and Exchange Commission for $125 million. The company didn’t admit or deny wrongdoing.
The presiding judge has said the trial would last about five weeks.
Mr. Milton founded Nikola in 2015. The company continues to attract partners, customers and established executives who are betting on its plan for a network of long-haul trucks powered by hydrogen fuel cells. The company began production of its first truck model, powered solely by batteries, in April.
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Appeared in the September 14, 2022, print edition as ‘Nikola Founder Painted Two Ways at Trial.’