Maker of electric trucks NikolaTo settle allegations that it misled investors about its technical capability, products and future business opportunities, the Securities and Exchange Commission was ordered to pay $125 million.

SEC officials stated they believed the penalty would be a warning for all companies looking to go public via a merger with an SEC member. special-purpose acquisition companySPAC, also known as the Securities and Privacy Administration Commission. Officials stated that statements made by companies seeking to tap the public capital markets must be 100% accurate.

This was the latest move by SEC to regulate SPACs more closely, also called “blank checks companies”. The regulator published new accounting guidanceSPACs surged in spring but were stopped by them in the spring. The surge began again in the fall.

Nikola was a public company that went public June 2020. It had previously warned investors of the likelihood of an expensive fine. Nikola was instrumental in enabling pre-revenue startups of electric vehicles to become public via SPAC transactions. After Tesla’s meteoric rise to the top of the market for automakers, they followed investors who became interested in these companies.

Federal agencies are investigating Nikola as a potential mislead investor. Others include Lucid, Lordstown MotorsAnd Canoo.

Nikola shares jumped to almost $100 in the last year, and its market value briefly exceeded that of FordIt never produced a vehicle for sale, however. Nikola closed Monday’s trading at $9.25/share, an 8.3% drop

Wall Street’s highest regulator ruled that Nikola was responsible for misleading claims made by Trevor Milton (founder and ex-chief executive officer of the company), who later pleaded guilty not guilty to fraud chargesIn July, the Justice Department brought this case.

Milton launched a PR campaign to inflate and maintain Nikola’s stock prices before the company produced a commercial product.

According to the commission, his media appearances and tweets gave investors false information that Nikola had attained certain technological and product milestones. These material information were used by many people when they invested in the firm.

Gurbir Grewal (Director of SEC Division of Enforcement) stated that Milton’s false claims “falsely represented the true state of company’s technology and business.” “This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today’s settlement provides.”

As expected, the SEC fine was paid. Nikola cooperated with the SEC in the investigation. CEO Mark Russell last month said Nikola expected to pay a $125 million penaltySEC in a proposal to settle civil fraud allegations for misleading investors.

Wall Street analysts saw this deal as an indication that the company was moving past the investigation.

Milton made an overnight fortune when he became a billionaire by taking his company public via a SPAC transaction through a blank company supported by Steve Girsky (ex-Vice Chairman General Motors).

Separate from the criminal investigation by the Department of Justice, an SEC probe is conducted and a fine issued. A federal grand jury accused MiltonTo boost the stock sale of the electric car start-up, July was used to lie about “almost all aspects” of the business.

Nikola said that Milton will reimburse it for any costs or damages incurred in relation to the investigation by government officials.

Following allegations that Milton and Hindenburg Research had lied to investors regarding Nikola’s technologies and business, the SEC launched an investigation.