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Nikola stock surges 10% after disgraced founder Trevor Milton ordered to repay $165 million

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Nikola’s founder and former CEO, Trevor Milton, was found guilty on three counts of fraud in October of 2022.

Massimo Pinca | Reuters

Shares of electric truck maker Nikola traded higher Tuesday afternoon after the company said in a regulatory filing that its disgraced founder, Trevor Milton, has been ordered to pay the company about $165 million in damages.

Shares were up about 10%, trading at a little more than $1. The company’s market value was nearly $379 million as of Tuesday afternoon.

Nikola said that an arbitration panel in New York determined last week that Nikola was due the funds for “costs and damages arising from actions that were the subject of government and regulatory investigations, including the December 2021 Securities and Exchange Commission settlement and associated civil penalty.”

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Nikola agreed in December 2021 to pay the SEC $125 million to settle charges that it defrauded investors by misleading them about its products, technical capacity and business prospects.

Nikola said in a statement that it intends to seek reimbursement for its attorneys’ fees as well.

Milton, who founded Nikola in 2014 and served as its CEO and executive chairman, resigned in September of 2020 after short-seller Hindenburg Research accused Nikola of making false statements about its technologies in order to boost its stock and secure partnerships with major automakers.  

Milton was found guilty in federal court last year on three counts of fraud related to statements he made while leading the company. He is scheduled to be sentenced Nov. 28.

Nikola will report its third-quarter results before the U.S. markets open on Nov. 2.

Source: CNBC

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