Nikola Corp has agreed to pay $125 million to settle civil charges leveled against it by the U.S. Securities and Exchange Commission (SEC). The regulator charged the company with defrauding investors and misleading them about its products. “We are pleased to bring this chapter to a close as the company has now resolved all government investigations,” the company wrote in a statement. “We will continue to execute on our strategy and vision to deliver on our business plan.”
The SEC accused the electric and hydrogen vehicle manufacturer of violating U.S. securities laws with a number of misleading statements about its in-house production capabilities, reservation book, and financial outlook between March and September 2020, reports Reuters.
Many of the issues stem from the company’s former CEO, Trevor Milton, who had criminal charges filed against him in July. The erstwhile executive is accused of repeatedly misleading investors about the company’s technology and capabilities and reaping “tens of millions of dollars” as a result of these actions.
Prosecutors in the case say that the ex-CEO claimed that the hydrogen-powered version of the truck would produce “nice cold, clean, pure drinking water” in a tweet in 2020, despite not knowing if that was possible. He also claimed that the Badger would create its own windshield washer fluid, the feasibility of which he only looked up online days later, prosecutors allege.
The $125 million settlement, meanwhile, was previously alluded to by the company in November, saying at the time that the deal was contingent on a vote from SEC commissioners.
The company has not admitted to nor denied any of the findings, but has agreed to cooperate with ongoing litigation and investigation, the SEC said. Nikola “is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” Gurbir Grewal, SEC enforcement director, said.
Nikola said in a statement that it has taken action to seek reimbursement from Milton “for costs and damages in connection with the government and regulatory investigations.”