Milton was charged with two counts of securities fraud and two counts of wire fraud, all related to statements he made about Nikola’s business while he was chairman and CEO of the company. Jurors found him guilty on one count of securities fraud and both of the wire fraud counts.
Milton will be sentenced on Jan. 27. He faced up to 25 years in prison if convicted on all four counts.
“Trevor Milton lied to Nikola’s investors — over and over and over again. That’s fraud, plain and simple,” said Damien Williams, the U.S. Attorney for the Southern District of New York. Williams said that the case against Milton should “serve as a warning” to others who make misrepresentations to investors.
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Many start up companies speak of the goals for their technology ideas. They often have performance goals to meet. Exaggerating potential must be common. The law allows a salesman some latitude in promoting his products.
When you embellish potential, how far can you go? Where do you cross the line?
I suppose lying about achieving those goals goes too far. But there must be a large gray area before that.
Companies with fledgling technology in development still need investor support to fund development. Those performance steps are sort of like spreading a trail of bread crumbs to keep backers on target.
If there are delays in achieving targets, how far can you go without committing fraud? And for that matter if failure of the company is at risk, how far would you go?
You pose questions which could apply to any number of “startups” still mixing “vapor promises” into their Future Stew.
Theranos, Enron (had 3 BUY recs from Wall St. Analysts day the plug was pulled), Lehman (see Enron, Jimmy Chill (Cramer) and Rick Tea Party for their stellar advice to buy right before the fall,) WorldCom, $TSLA (battery swaps, pigs with chips walking on treadmills, solar shingles and 1,000 roofs weekly, FSD/Autopilot still at level 2, etc.) $CVNA, $PTON, $UBER, ad infinite.
The way of Late Stage Capitalism is ripped directly out of the book of The Paypal Mafia and their motto “Let It Burn.”
What did the CEO of $NKLA do which Musk hasn’t done in the past when it comes to dog and pony shows for investors?
Clearly, when Silicon Valley Bros are pumping their stocks with the promise of future magic, buffaloed retail investors need the daily reminder that never has fraud been so easily marketed - by CEOs on social media.
This is the reason I won’t quit Twitter when Musk takes it over: i.e., I want to see just how desperate the old boy is when hiding behind this “free speech” cover when in essence, he will have the power to see everything behind every account on Twitter, he will be able to punish his detractors, and the critics he already blocks on Twitter may as well search for new posting grounds elsewhere. (I hear Ye is buying Parler. Now there’s a perfect dot at the bottom of the exclamation point of Late Stage Capitalism!)