A regulatory filing from Nikola has revealed that former chief executive and founder Trevor Milton has been ordered to pay the company about $165 million in damages. The update appears to have been appreciated by investors, as NKLA stock ended the day up 8.9%.
Nikola stated that an arbitration panel in New York determined last week that the company was due the funds over costs and damages that it incurred due to its previous CEO’s controversial actions.
“On October 20, 2023, an arbitration panel in New York, New York awarded Nikola Corporation (the “Company”) approximately $165 million plus interest in an arbitration proceeding with the Company’s founder and former executive chairman.
“The Company had sought reimbursement from its founder and former executive chairman for costs and damages arising from actions that were the subject of government and regulatory investigations, including the December 2021 Securities and Exchange Commission settlement and associated civil penalty. The Company intends to file with the arbitration panel an application to recover attorneys’ fees related to the matter,” Nikola’s filing read.
As noted in a CNBC report, Nikola had agreed in December 2021 to pay a fine of $125 million to the SEC. The penalty was to settle allegations that the company defrauded investors about its products, business prospects, and technology. Nikola is also looking to secure reimbursement for its attorneys’ fees.
Prior to his controversial resignation from Nikola in September 2020, Trevor Milton was considered by media outlets as one of the up-and-coming leaders in the sustainable transport sector. Tesla short sellers have even compared Milton favorably against Elon Musk, Tesla’s CEO.
Milton’s unraveling was triggered by an expose from Hindenburg Research, which accused Nikola of making false statements about its projects, such as the Nikola One. Milton was eventually found guilty in federal court last year of three counts of fraud. His sentencing is expected to be held on November 28.
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