Trevor Milton, the founder and former chairman of car-maker Nikola Motor, has been charged by U.S. prosecutors with three counts of fraud stemming from an investigation into the company sparked by a short-seller last year.
The new charges by the U.S. Attorney’s Office in Manhattan allege Milton, 39, made deceptive and false statements about Nikola between November 2019 and September 2020 to defraud investors into buying the company’s shares.
In a statement, Nikola, which has not been charged with wrongdoing, noted Milton has not been involved in company “operations or communications” since he resigned in September and said it has cooperated with the government throughout its inquiry.
Nikola shares plunged 7% in pre-market trading immediately after the news, pushing its losses this year to nearly 18%.
Representatives for Milton did not immediately respond to Forbes‘ requests for comment.
$1.3 billion. That’s how much Milton was worth as of Wednesday’s market close, according to Forbes. Milton founded in 2014 to build semi trucks powered by batteries and hydrogen.
Though it initially skyrocketed after its buzzy trading debut, Nikola shares have struggled ever since short-seller Hindenburg, which says it holds no position in the firm, published a report last September, calling the electric-vehicle company an “intricate fraud,” and alleging then-Chairman Milton misled investors about the company’s business. The SEC is still investigating those claims, but Milton has since resigned, and legacy carmaker GM pulled out of a massive partnership with the firm late last year.
This is a developing story. Please check back for updates.