Convicted Nikola founder Milton owes electric truck maker $168 million, judge rules
7:38 pm Tuesday, September 10th, 2024
By Jonathan Stempel
(Reuters) -A U.S. judge said Trevor Milton, the Nikola founder who was sentenced to four years in prison after being convicted of fraud, must pay the electric truck maker $167.7 million for making false and misleading statements about the company to the public.
In a decision on Monday, U.S. District Judge Diane Humetewa in Phoenix upheld a divided arbitration panel’s November 2023 award in Nikola’s favor.
Humetewa said the panel acted within its authority in interpreting a separation agreement that Milton entered when he resigned as Nikola chief executive in September 2020.
The panel found Milton liable to pay $121.25 million, or 97%, of Nikola’s $125 million fine from settling a U.S. Securities and Exchange Commission civil fraud case, and to cover nearly $46.5 million in legal fees and expenses.
Milton, 42, argued the award was excessive and amounted to “rough justice” because the panel ignored the “relative fault” of other Nikola executives, directors and employees.
But the judge said the panel’s analysis was plausible, including its assigning 3% fault to the Phoenix-based company for failing to stop Milton from misleading investors.
Lawyers for Milton did not immediately respond to requests for comment on Tuesday.
Marc Kasowitz, a lawyer for Nikola, said the company was “gratified but not surprised” at the decision, in light of Milton’s “pattern of false and misleading public statements. We look forward to collecting the award.”
Jurors in Manhattan convicted Milton in October 2022 on 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 improper statements included that Nikola built a pickup from the “ground up,” developed batteries he knew it was buying elsewhere, and had made progress in creating a “Nikola One” semi-truck he knew did not work.
Milton is free on bail while he appeals his conviction and December 2023 sentence.
The case is Nikola Corp v Milton, U.S. District Court, District of Arizona, No. 23-02635.
(Reporting by Jonathan Stempel in New YorkEditing by Matthew Lewis and Lincoln Feast.)
