US SEC Imposes $125 Million Fine on Nikola Corporation

The Securities and Exchange Commission (SEC) recently announced that it has charged Nikola Corporation, a publicly traded company created through a special purpose acquisition company transaction, to pay a penalty of $125 million for defrauding investors.

As detailed by the regulator, before Nikola had produced a single commercial product, the company's founder and former CEO Trevor Milton embarked on a public relations campaign aimed at inflating and maintaining Nikola's stock price.

Milton's statements in tweets and media appearances falsely gave investors the impression that Nikola had reached certain product and technological milestones. The commission's order finds that Nikola violated the antifraud and disclosure control provisions of the federal securities laws.

"As the order finds, Nikola Corporation 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,"said Gurbir S. Grewal, Director of the SEC's Division of Enforcement."This misconduct — and the harm it inflicted on retail investors — merits the strong remedies today's settlement provides."

Nikola agreed to cease and desist from future violations of the charged provisions, to certain voluntary undertakings, and to pay a $125 million penalty.

Last week, SEC has charged J.P. Morgan Securities LLC (JPMS)​, a broker-dealer subsidiary of JPMorgan Chase & Co., to pay a penalty of $125 million for widespread and longstanding failures to maintain and preserve written communications.