Nikola founder Trevor Milton was sentenced to four years in prison Monday due to fraudulent claims about his electric vehicle company.
In court Monday, Milton portrayed himself as a generous and honest yet unsophisticated businessman who grew up milking cows, lacked a college degree and did not mean to defraud investors in his electric truck company. . . .
Prosecutors described Milton’s business practices as a “sustained scheme to take advantage of individual, non-professional investors” in order to inflate Nikola’s stock price and enrich himself.
“Milton over and over again exaggerated or outright lied about Nikola’s success in a way that misled investors about the risks and likely returns of their investments,” prosecutors said.
From a 2nd (earlier) article:
". . . . The company subsequently conceded video of its electric truck gave a misleading impression it was actually drivable. The company also said Milton had made inaccurate statements about the technology behind the vehicle. Federal prosecutors agreed.
The false promotional video for the semi-truck prototype known as Nikola One was referenced heavily in the indictment. The concept included a shot of the Nikola One coming to a stop in front of a stop sign, according to the indictment.
"In order to accomplish this feat with a vehicle that could not drive, the Nikola One was towed to the top of hill, at which point the ‘driver’ released the brakes, and the truck rolled down the hill . . . "
In the company’s defense,
after the allegations (that the video was faked) came to light
company official pointed out that “Nikola never stated its truck was driving under its own propulsion in the video.”
Guffaw. It’s true I guess. the narrator says a lot of great things about the company, facing challenges, overcoming skeptics etc, but neve actually say "see this truck is driving under its own power.
I still do not understand how so many start ups make zero dollars or worse make show massive losses yet are still purchased for millions if not billions of dollars or become publicly traded companies and their stock is at sky high prices.
When I considered selling my company I discovered that there are companies who will make your business look good for possible purchasers. At the same time I discovered that there were other companies who specialize in making companies look really good entering a stock market. And I remember a person I know who had a young company up for sale. He went out and purchased a bunch of machine frames and then used spare parts to build them up a bit. When the potential buyers came in to see the business they saw all the frames in process and made the purchase based on what they saw and not what was on the books. Their purchase ultimately failed.
I am not sure how or why they get listed/
Failure by the SEC?
Failure by Standard and Poors?
Prior to going public, they get start-up capital, private equity etc. because the relationship between the Fed and commercial banks has changed and banks) often tiny banks owned by private owners, can now be used a little more than window-dressing to allow venture capitalists to access Fed funding windows for their highly-speculative enterprises.
The Fed never should have allowed its funding windows to be used this way.
I suspect they did so joyfully, willingly “Whee! We get to expand and become bigger and more powerful. We are great!”
(I was just about to start discussing this topic on another thread. Interesting that it popped-up here.)
I wonder how much those battery powered Semi’s would weigh they are already terrifying enough coming down the interstate at 85 mph at nighttime I can only imagine these things with double the weight in an accident.
I remember asking him if he “cooked” the books and he said no. He told me that they asked if he had purchase orders for all of the machines and he replied; “They are all in the build up state”. So he didn’t lie and they never checked the books which would have reveled that he didn’t have P.O.'s for all of them. He possibly could have been brought up on charges, but was not. I do know that he could have been charged if he had manufactured fake P.O.'s for the machines.
