Nikola Corp., the zero-emissions vehicle maker based in Phoenix, announced on Tuesday that, as expected, it agreed to pay $125 million to the Securities and Exchange Commission to settle charges that it had defrauded investors by misleading them about its commercial prospects.
The SEC order against Nikola said that in years past, before the company had any products on the market, founder and then-CEO Trevor Milton used public relations and social media to inflate the company’s share price.
“Milton’s statements in tweets and media appearances falsely gave investors the impression that Nikola had reached certain product and technological milestones,” the SEC said on Tuesday. “The order also finds that Nikola further misled investors by misrepresenting or omitting material facts about the refueling time of its prototype vehicles, the status of its headquarters’ hydrogen station, the anticipated cost and sources of electricity for its planned hydrogen production, and the economic risks and benefits associated with its contemplated partnership with a leading auto manufacturer,” referring to the smaller-than-expected partnership with GM the company eventually reached.
Under the terms of the resolution, Nikola Corp. neither admits nor denies the SEC’s findings. The company had previously announced that it anticipated making this settlement back in November.