Chris Prentice

WASHINGTON, (Reuters) – Nikola Corp agreed to $125 Million to resolve civil charges it lied about investors’ products, technological advancements, and future prospects. This was according to the U.S. Securities regulator on Tuesday.

Securities and Exchange Commission of the United States (SEC) charged an electric vehicle manufacturer with violating U.S. Securities Laws by misleading statements that were made between March and September 2020 concerning in-house production capabilities and reservations book, financial outlook and other matters.

This settlement comes after Trevor Milton, Nikola’s founder was charged with using social media to mislead investors regarding the company’s capabilities and technology. He also faces criminal and civil charges. Milton has lost the bid to dismiss or transfer these charges and is now fighting them in court.

Nikola has agreed to assist in the ongoing investigation and litigation. The firm did not acknowledge or deny any of the SEC findings. In November, the firm had previously made public its expectations for a heavy penalty.

Nikola “is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” Gurbir Grewal, the SEC’s enforcement director, said in a statement.

Nikola became public in June 2020 via special purpose acquisition company, (SPAC) – a process that the SEC has criticised for having required less initial screening than the traditional first public offering.

According to the SEC chair, this month the agency will be reviewing the rules for how SPAC sponsors and underwriters set up fees, project projections, disclose conflicts, as well as the board of directors.

This is part of a wider crackdown by the SEC on the sector. In addition to telling top auditors that they must change their accounting practices, the agency launched an extensive enforcement probe into Wall Street banks implicated in the transactions.