Former Nikola CEO Trevor Milton would be paying Nikola, the company he founded, $167.7 million over his false and misdealing statements to the public. The decision was made by U.S. District Judge Diane Humetewa in Phoenix on Monday.
Milton was convicted by jurors in Manhattan in October 2022 on two counts of wire fraud and two counts of securities fraud. Prosecutors at the time argued that Milton misled investors about some of Nikola’s projects, including the hydrogen/electric Badger pickup truck, which was not built, and the Nikola One, a supposed hydrogen semi truck that was rolled down a hill to show that it was in motion.
In her decision, Judge Humetewa upheld a divided arbitration panel’s November 2023 award in the electric truck maker’s favor. As noted in a Reuters report, Judge Humetewa stated that the panel had acted within its authority in interpreting a separation agreement between Milton and Nikola that the former CEO signed when he stepped down from his chief executive post in September 2020.
The panel had concluded that Milton was liable to pay 97% of Nikola’s $125 million fine, which the electric truck maker paid to settle a civil fraud case that was filed by the U.S. Securities and Exchange Commission (SEC). The panel also noted that Milton was liable to cover almost $46.5 million in legal fees.
Milton, for his part, has argued that the award to Nikola was excessive. He also claimed that the award amounted to “rough justice” since the panel effectively ignored the “relative fault” of Nikola’s directors, executives, and employees. Judge Humetewa, however, maintained that the panel’s analysis—which assigned a 3% fault to Nikola for failing to stop Milton from misleading investors—was plausible.
Nikola lawyer Marc Kasowitz stated that the electric truck maker was “gratified but not surprised” at the court’s decision considering the former CEO’s pattern of sharing false and misleading public statements. Kasowitz noted that Nikola is looking forward to getting its award from its former CEO. “We look forward to collecting the award,” the lawyer noted.
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