Nikola Corp., a Phoenix-based manufacturer of zero-emissions heavy trucks, has confirmed that it reached a settlement with federal regulators over allegedly misleading statements made by Trevor Milton, its founder and former CEO.
The company, which recently made its first delivery of Arizona-made trucks, will pay $125 million in civil penalties in five installments over two years as part of the settlement with the U.S. Securities and Exchange Commission. The agreement “resolves and concludes all government investigations of Nikola,” the company said.
Nikola shares were higher in trading Tuesday, and closed up 17 cents per share at $9.42.
The first payment will be made by the end of 2021, with the remaining installments paid semiannually through 2023. Nikola reserved $125 million against its third-quarter earnings to account for the settlement.
When the SEC announced charges in July, officials accused Milton of using social media platforms to mislead investors about the company’s technological and production capabilities, among other issues.
“Having chosen to promote Nikola through social media, Milton was obligated under the securities laws to communicate completely, accurately and truthfully,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said at the time.
Pilot run for trucks in California
The SEC settlement was the second notable announcement by Nikola over the past week. The company on Dec. 17 said it made its first vehicle deliveries last week to Total Transportation Services. The Arizona-made battery-electric trucks operate in trial runs around the ports of Los Angeles and Long Beach, where air pollution is worsened by truck and train traffic and ships anchoring in and near the ports.
The trucks were made at Nikola’s new factory in Coolidge in Pinal County.
A letter of intent signed by Total Transportation Services calls for 100 zero-emission trucks after satisfactory completion of the vehicle trials, with additional deliveries after that.
Nikola, which was founded in 2015, also has started making trucks in Ulm, Germany.
Troubling chapter comes to end
As for the SEC settlement, Nikola issued a statement that it is “pleased to bring this chapter to a close” in resolving all government investigations.
“We will continue to execute on our strategy and vision to deliver on our business plan, including delivering trucks to customers, expanding our manufacturing facilities and our sales and service network, and building out our hydrogen-infrastructure ecosystem.”
Nikola neither admitted nor denied the SEC’s findings and is pursuing reimbursement from Milton for costs and damages tied to regulatory investigations. Milton faces criminal charges in the matter but has pleaded not guilty. The government alleges he made inaccurate comments about Nikola’s products to drive up the stock price.
Nikola, which is headquartered in Phoenix south of Sky Harbor International Airport, is developing battery-electric and hydrogen-electric vehicles as well as vehicle components, hydrogen fueling stations and more.
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