Jonathan Stempel

NEW YORK, Reuters – On Monday, a U.S. Judge refused to dismiss a Federal Indictment accusing Nikola Corp founder Trevor Milton of defrauding investors regarding the technology used in its electric-and hydrogen-powered trucks.

U.S. District Judge Edgardo RAMOS rejected Milton’s argument that he shouldn’t have been indicted for wire fraud and securities fraud in New York because the alleged lies were made in Arizona and Utah where he lives and therefore, the case should be in New York.

According to the Manhattan judge, Milton (39) could face trial in New York if Milton traded Nikola stock on Nasdaq or made false statements.

Ramos stated that other factors supported the case being kept in New York, despite Milton’s desire to take care of his wife at home. According to court documents Milton has an autoimmune disorder as well as other serious health problems.

Milton’s lawyers didn’t immediately reply to our requests for comment. They called the indictment “legally flawed” and intend to pursue a dismissal based on substantive grounds.

Nikola was not accused of any wrongdoing.

Officials claim that Milton used social media and interviews on TV and radio to boost Nikola’s stock market price for nearly one year.

Prosecutors claimed that Nikola falsely claimed he had made an electric-and hydrogen-powered pickup starting from scratch, developed batteries to match the price of other buyers and worked on a prototype truck that he was certain would not work.

Milton, who founded Phoenix’s Nikola in 2014, was its chief executive. The company went public when it merged with SPAC Special-purpose Acquisition Company (SPAC) in June 2020.

A burgeoning market for SPACs is an investment vehicle that allows sponsors to take private companies public quicker than initial public offerings. However, critics claim they are susceptible to conflicts of interests and poor due diligence.

Nikola is not the only vehicle startup that has used SPACs. They also use them to help their companies achieve high market valuations.

Investigators are currently investigatingLordstown Motors Corp, an electric truck manufacturer. They want to know more about the SPAC of its vehicle pre-orders and other statements.

U.S., v Milton. U.S. District Court Southern District of New York. 21-cr-00478.