The U.S Securities and Exchange Commission has officially sought to drop its civil case against Trevor Milton, the founder and former chief executive of Nikola Corporation, the electric and hydrogen truck startup that once captivated the imagination of investors.
Background of the Case
The case was originally filed in 2021, accusing Milton of misleading investors with exaggerated claims about Nikola’s technological progress. He was alleged to have said the company built an electric- and hydrogen-powered pickup from scratch and developed its own battery technology, even though key components had been sourced from outside suppliers.
In a recent filing with the federal court in New York, Milton agreed not to pursue legal fees and dropped any potential claims against the regulator. The filing stated that dismissing the case was in the exercise of the SEC’s discretion, effectively closing this chapter of litigation.
Conviction and Nikola’s Collapse
Milton’s legal troubles began years earlier, being surrounded by allegations of deception that caused his resignation from the company. Convicted in October 2022 on charges of securities and wire fraud for misleading investors about Nikola’s technology and business prospects, he was sentenced to four years in prison. Earlier this year, he received a presidential pardon. Meanwhile, Nikola faced challenges of its own. Once considered a potential rival to Tesla, Nikola’s stock price came crashing down, leading to filing for Chapter 11 bankruptcy protection by February 2025 due to ancillary cash. Current strategies include selling off its remaining assets.
What the Dismissal Means
The SEC shutting down its civil enforcement action does not negate Milton’s criminal conviction but clears one of the last remaining legal issues connected to the turbulent past of the company. For Nikola, it puts a definitive end to that unusual mix of high-profile success-turned-cautionary tale about hype in the electric vehicle industry.
