EVs: Nikola Expects To Pay $125M SEC Penalty
Embattled electric vehicle company Nikola (NASDAQ: NKLA) expects to pay a substantial fine to settle its problems with the US Securities and Exchanges Commission (SEC). The company has set aside $125mn that it expects to pay as part of a proposed settlement with the agency for civil fraud charges for allegedly deceiving investors.
- The SEC began investigating Nikola following a report from short-seller Hindenburg Research accusing the EV company of widespread deception. Hindenburg’s report was the kickstart of Nikola’s regulatory woes, leading to criminal charges against its founder, Trevor Milton.
- For the SEC’s probe, Nikola said it has “been engaged in discussions regarding a resolution” that, if approved, will include a $125mn penalty.
- Nikola is also under investigation from the Justice Department (DOJ), which indicted Trevor Milton in June for securities and wire fraud for allegedly lying to investors on many occasions.
- Milton was ousted entirely from Nikola this year, though he remains a major shareholder. Mark Russell, a former Ford executive, replaced him as CEO and is trying to keep Nikola’s remains on its feet, such that the embattled EV firm still plans to manufacture and deliver its battery-electric semi-trucks.
- From an ambitious company with a huge investor following to a major downfall, Nikola is a telltale for positive sentiment driven primarily by the hype without regard to fundamentals. At its peak, the company was worth $34bn.