Trevor Milton, the founder of electric truck startup Nikola, has been charged with three counts of fraud by the U.S. Attorney’s Office in connection with the investigation into the electric vehicle start-up.

Federal prosecutors in Manhattan accused Milton, who resigned as chairman in September, of making deceptive and false claims regarding “nearly all aspects of the business,” according to a grand jury indictment that was unsealed Thursday.

Nikola released a statement Thursday morning.

“Trevor Milton resigned from Nikola on September 20, 2020 and has not been involved in the company’s operations or communications since that time. Today’s government actions are against Mr. Milton individually, and not against the company.  Nikola has cooperated with the government throughout the course of its inquiry. We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities.”

The news was immediately felt on Wall Street, as Nikola’s share price dropped 10% in the first 40 minutes of trading Thursday (NASDAQ: NKLA).

Prosecutors charged Milton with two counts of securities fraud, including making false statements about the company, and wire fraud.

The indictment said that, from November 2019 to September 2020, Milton schemed to defraud investors into buying Nikola shares through statements about the company’s product and technology development.

According to CNBC, the 49-page indictment noted prosecutor’s claims that “Milton’s scheme targeted individual, non-professional investors — so-called retail investors — by making false and misleading statements directly to the investing public through social media, and television, print and podcast interviews.” 

Under the indictment, Milton is ordered to forfeit all property “traceable to the commission of said offenses,” which will likely include more than $1 billion he pocketed went he took Nikola public last June.

Milton resigned as Nikola’s executive chairman and gave up his board seat Sept. 20, 2020. Ten days earlier, short seller Hindenburg Research published a scathing 67-page report accusing Milton of fraud and deception by overstating technology claims before the company went public.

The report was titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America,” and cited numerous false assertions about Nikola’s technology, including producing a video in which a truck was rolled down an incline in order to create the appearance of a working prototype.

The Hindenburg accusations on Sept. 10 came two days after Nikola announced a manufacturing partnership and supply deal with General Motors Co. (NYSE: GM). The automaker would provide battery and fuel cell technology and build the Nikola Badger electric pickup truck in exchange for an 11% stake in the company. 

When he left the company as executive chairman in September, Milton agreed to vote his shares according to the desires of the board of directors and do nothing to seek to regain the board seat he gave up or support anyone for a board seat other than board recommendations.

Those assurances earned Milton a speedup of vesting in 600,000 additional shares of Nikola stock.

More details to come on this developing story.

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