Case 1:21-cv-06445 Document 1 Filed 07/29/21 Page 1 of 65
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`UNITED STATES DISTRICT COURT
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`UNITED STATES SECURITIES AND
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`EXCHANGE COMMISSION,
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`Plaintiff,
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`TREVOR R. MILTON,
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`Defendant.
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`COMPLAINT
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`Civil Action No. 1:21-cv-6445
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`JURY TRIAL DEMANDED
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`Plaintiff United States Securities and Exchange Commission (the “Commission”), for its
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`Complaint against Defendant Trevor R. Milton (“Milton”), alleges as follows:
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`SUMMARY
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`1.
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`Trevor R. Milton, the founder, largest stockholder, and former Chief Executive
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`Officer and Executive Chairman of Nikola Corporation (“Nikola”), a publicly traded company,
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`engaged in a fraudulent scheme to deceive retail investors about Nikola’s products, technical
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`advancements, and commercial prospects for his own personal benefit in violation of the federal
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`securities laws. Milton did so primarily by leveraging his social media presence and frequent
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`appearances on television and podcasts to flood the market with false and misleading
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`information about Nikola.
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`2.
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`Milton founded Nikola in 2015 with the primary goals of manufacturing semi-
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`trucks that run on alternative fuels with low or zero emissions and building an alternative fuel
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`station infrastructure to support those vehicles. To accomplish these goals, Nikola needed to
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`Case 1:21-cv-06445 Document 1 Filed 07/29/21 Page 2 of 65
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`raise billions of dollars to develop vehicles and infrastructure that had never before been
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`developed or adopted on a commercial scale. Over the course of several private offerings, and
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`then in connection with a business combination with a special purpose acquisition company
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`(“SPAC”), Nikola raised more than $1 billion dollars, most of it from institutional investors.
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`After entering into a business combination with the SPAC, Nikola began trading on the Nasdaq
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`Global Select Market (“Nasdaq”).
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`3.
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`Before Nikola had produced a single commercial product or had any revenues
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`from truck or fuel sales, Milton embarked on a relentless public relations blitz aimed at a class of
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`investors he called “Robinhood investors.” Through frequent nationally televised media
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`appearances and a ubiquitous presence on social media (where he garnered over 100,000
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`followers on Twitter alone), Milton built a significant following for himself and Nikola. In these
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`appearances and on social media, Milton presented himself as a different type of CEO – one who
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`“cared” and was “transparent” with the average investor. As part of his publicity campaign,
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`Milton encouraged prospective investors to follow him on social media to get “accurate
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`information” about the company “faster than anywhere else.” In reality, however, Milton used
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`his platform to mislead investors, which helped inflate and maintain Nikola’s stock price.
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`4.
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`From approximately November 2019 through September 2020, Milton’s
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`statements in tweets and media appearances, individually and taken together, painted a picture of
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`Nikola that diverged widely from its then-current reality. Milton sold a version of Nikola not as
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`it was – an early stage company with a novel idea to commercialize yet-to-be proven products
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`and technology – but rather as a trail-blazing company that had already achieved many
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`groundbreaking and game-changing milestones. In presenting his version of Nikola to investors,
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`Milton repeatedly made false and misleading statements about core aspects of Nikola’s products,
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`technological advancements, and commercial prospects, including, among others:
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`(a)
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`Falsely claiming that Nikola’s first semi-truck prototype, the Nikola One,
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`could be driven under its own power, and using a misleading video to create the false
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`impression that the Nikola One was, in fact, driving under its own power;
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`(b)
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`Falsely claiming that Nikola was producing hydrogen, that it was doing so
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`at a cost that was four times less than the prevailing market rates, and that it had obtained
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`electricity at costs that made hydrogen production profitable;
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`(c)
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`Falsely claiming that Nikola had significantly developed or already
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`completed a prototype of an electric pickup truck, the Badger, and that this vehicle used
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`primarily Nikola’s proprietary components;
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`(d)
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`Falsely claiming that Nikola had obtained “billions and billions and
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`billions and billions” of dollars of committed truck orders;
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`(e)
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`Falsely claiming that Nikola had developed a “game-changing” battery
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`technology and that Nikola was manufacturing and developing multiple key vehicle
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`components “in-house”; and
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`(f)
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`Falsely claiming that the total cost of ownership of Nikola’s trucks was
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`20-30 percent below that of diesel vehicles.
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`5.
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`At the time he made the misstatements identified above, Milton knew or was
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`reckless in not knowing that Nikola had not accomplished what he claimed. Instead, much of
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`what Milton represented as accomplishments were, at best, internal targets years away from
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`completion and subject to significant execution risks or, worse, ideas conceived only on paper.
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`As a result, Milton made numerous materially false and misleading statements about critical
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`aspects of Nikola’s business.
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`6.
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`Milton’s false and misleading statements generated significant interest among
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`many of the retail investors who followed him on social media, watched or listened to his
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`interviews, and purchased Nikola’s stock.
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`7.
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`Milton had motive to lie about the company’s accomplishments, given his
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`position as Nikola’s largest stockholder and his compensation structure, which provided the
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`opportunity for additional stock awards by maintaining a run-up in Nikola’s stock price. As
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`detailed below, upon the completion of the Business Combination, Milton held approximately 25
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`percent of Nikola’s stock and further stood to earn millions more shares if Nikola’s stock
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`reached certain price milestones and remained at each milestone for a specified period of time.
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`Milton ultimately reaped tens of millions of dollars in personal benefits as a result of his
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`misconduct.
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`8.
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`Milton violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) and
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`Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5
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`thereunder. The Commission seeks (i) permanent injunctive relief; (ii) disgorgement of ill-
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`gotten gains and prejudgment interest thereon; (iii) civil penalties; (iv) an officer and director
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`bar; and (v) such further relief the Court may deem just and appropriate.
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`JURISDICTION AND VENUE
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`9.
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`The Commission brings this action against Milton pursuant to authority conferred
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`upon it by Sections 20(b) and 20(d) of the Securities Act [15 U.S.C. §§ 77t(b) and 77t(d)] and
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`Sections 21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 78u(e)].
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`10.
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`This Court has jurisdiction over this action pursuant to Section 22(a) of the
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`Securities Act [15 U.S.C. § 77v(a)] and Sections 21(d), 21(e), and 27 of the Exchange Act [15
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`U.S.C. §§ 78u(d), (e), and 78aa].
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`11.
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`In connection with the conduct described in this Complaint, Milton, directly or
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`indirectly, made use of the mails or means or instruments of transportation or communication, or
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`of facilities of a national securities exchange, in interstate commerce.
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`12.
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`Venue is proper in this District pursuant to Section 20 of the Securities Act [15
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`U.S.C. § 77t] and Section 27 of the Exchange Act [15 U.S.C. § 78aa]. Milton transacted
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`business in this District, and certain of the acts, practices, transactions, and courses of business
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`constituting violations of the securities laws alleged in this Complaint occurred within this
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`District. Milton regularly communicated via multiple online platforms with users located in this
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`District. Investors who bought Nikola stock, and were harmed by the conduct alleged herein,
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`reside in this District. Nikola is traded on the Nasdaq, which is headquartered in this District.
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`Trades in Nikola securities were handled and executed by trading personnel located in this
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`District during the relevant period. Nikola’s corporate predecessor, VectoIQ Acquisition Corp.,
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`with which Nikola merged to become a public company, was also headquartered in this District.
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`DEFENDANT
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`13.
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`Defendant Trevor R. Milton is a resident of Oakley, Utah. In 2015, he founded
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`Bluegentech LLC, which in July 2017 converted from a limited liability company to a Delaware
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`corporation and changed its name to Nikola Corporation (“Legacy Nikola”). Milton was Chief
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`Executive Officer (“CEO”) and Chairman of the Board of Directors of Legacy Nikola from its
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`inception until June 3, 2020, when Legacy Nikola entered into the Business Combination (as
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`defined below). From June 3, 2020 until September 20, 2020, Milton was Nikola’s Executive
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`Chairman. In this executive officer position, Milton supervised Nikola’s CEO. According to
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`Nikola’s filings with the Commission, Milton resigned as Executive Chairman of Nikola and
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`from Nikola’s Board of Directors on September 20, 2020.
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`RELEVANT ENTITY
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`14.
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`Nikola, incorporated in Delaware and headquartered in Phoenix, Arizona,
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`describes itself as a vertically integrated zero emissions transportation system provider that
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`designs and manufactures battery electric vehicles (“BEV”), hydrogen fuel cell electric vehicles
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`(“FCEV”), and hydrogen station infrastructure. On June 4, 2020, Nikola’s common stock and
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`warrants began trading on the Nasdaq under the symbols NKLA and NKLAW, respectively.
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`15.
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`Nikola was previously known as VectoIQ Acquisition Corp. (“VectoIQ”), a
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`Delaware corporation headquartered in New York, New York. VectoIQ was formed in January
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`2018 as a SPAC for the purpose of effecting a business combination with one or more
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`businesses. VectoIQ completed an initial public offering in May 2018, at which time its
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`securities began to be quoted on The Nasdaq Capital Market.
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`16.
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`On June 3, 2020, VectoIQ consummated a business combination with Legacy
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`Nikola pursuant to a Business Combination Agreement, dated March 2, 2020 (the “Business
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`Combination Agreement”). Under the Business Combination Agreement, a wholly-owned
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`subsidiary of VectoIQ merged into Legacy Nikola, with Legacy Nikola remaining as the
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`surviving company and as a wholly-owned subsidiary of VectoIQ, which then changed its name
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`to Nikola Corporation1 (the “Business Combination”).
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`1 Unless specified otherwise, references in this Complaint to Nikola refer to, depending on the context, Legacy
`Nikola prior to the Business Combination and to Nikola Corporation after the Business Combination. References in
`this Complaint to VectoIQ refer to VectoIQ prior to the Business Combination.
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`FACTUAL ALLEGATIONS
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`I.
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`Nikola Background and the Business Combination
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`17. Milton founded Nikola in 2015 with the primary goals of manufacturing semi-
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`trucks that used alternative fuels with low or zero emissions and building a station infrastructure
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`to support those vehicles. Since approximately 2016, Nikola has focused on producing FCEV
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`Class 82 trucks. Later, Nikola also began to develop Class 8 BEV trucks.
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`18.
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`Although BEV cars have existed for a number of years, FCEV cars are less
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`common and FCEV Class 8 trucks have never been commercially deployed. The lack of
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`commercial deployment of FCEV trucks thus far is largely due to the high barriers to entry,
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`including, among other things, the high cost of dispensable hydrogen compared to traditional
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`fuels, and the high cost of hydrogen dispensing infrastructure, which is uneconomic to build
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`without vehicles to support it.
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`19. Milton claimed that Nikola could solve the barriers to entry by, among other
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`things: (i) offering a bundled lease for its trucks that included the cost of hydrogen fuel; (ii)
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`constructing a nationwide network of hydrogen refueling stations around routes of customers
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`who have committed to lease Nikola’s trucks; and (iii) obtaining cheap electricity that would
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`enable the company to produce hydrogen at a fraction of current market rates.
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`20.
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`Nikola’s business plan required billions of dollars of capital to finance the
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`development and manufacturing of trucks and station infrastructure, which were not expected to
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`generate profits until years in the future. From 2015 through March 2020, Nikola raised over
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`$500 million through private offerings directed mostly at institutional investors.
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`2 Class 8 trucks are those with a gross vehicle weight rating exceeding 33,000 pounds. Semi-trucks or “18-wheeler”
`trucks typically are Class 8 vehicles.
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`21.
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`In November 2019, VectoIQ targeted Nikola as a potential business combination
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`partner. On March 2, 2020, VectoIQ and Nikola entered into the Business Combination
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`Agreement, as well as certain related agreements, pursuant to which Nikola would merge with a
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`subsidiary of VectoIQ and effectively become the surviving, publicly-traded entity when the
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`transaction closed.
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`22.
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`In connection with the Business Combination, Legacy Nikola investors had their
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`stock converted to VectoIQ common stock, and VectoIQ raised from institutional investors
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`approximately $525 million in a private investment in public equity (“PIPE”) offering. Milton
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`participated in the PIPE marketing efforts by, among other things, making presentations at
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`investor meetings.
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`23.
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`As a result of the Business Combination, Nikola received, according to its filings
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`with the Commission, a net contribution of approximately $594.5 million from VectoIQ, an
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`amount that excludes a $70 million payout to Milton made at the closing of the transaction. The
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`parties consummated the Business Combination on June 3, 2020. The following day, Nikola’s
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`stock began trading on the Nasdaq.
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`24.
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`Between March 2, 2020 when the Business Combination was announced, and
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`June 3, 2020 when it was effected, investors could buy and sell VectoIQ stock based on the
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`reasonable anticipation that upon the completion of the Business Combination, an investor’s
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`ownership of VectoIQ stock would make them an equity owner of Nikola.
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`II. Milton’s Roles at Nikola and his Control Over the Company
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`25.
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`Until the Business Combination, Milton served as Nikola’s CEO, was Chairman
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`of its Board of Directors, and was its largest stockholder. Immediately after the Business
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`Combination, Milton held, through a vehicle he wholly owned and controlled, approximately 25
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`percent of the company’s stock, and he remained the company’s largest stockholder during the
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`relevant period.
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`26.
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`Following the Business Combination, Milton switched roles from CEO to
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`Executive Chairman. Milton explained on the Chartcast podcast that his change in title was a
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`promotion that allowed him to have nearly unfettered control over the company:
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`I can assume any role [I] want[] at any time, whenever it needs and
`all . . . roles report directly up to the executive chairman . . . in other
`words, the CEO reports directly to me and I have the ability to . . .
`assume or manage any division, any person . . . anyone inside the
`company, any given time I need to, because they believe that I have
`. . . more knowledge and more vision than anyone in the company.
`And so they wanted to make sure I had no restrictions on that.
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`27.
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`Retaining control of Nikola was important to Milton. For example, when a
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`member of Nikola’s Board of Directors urged Milton in January 2020 to appoint to Nikola’s
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`Board additional independent members with public company experience, Milton responded, in
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`part:
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`The most important [sic] is that I fully control the board at all times
`and have people who work well with my personality….No one sees
`the future like I do, and if you get too many world class brilliant
`people on the board, you will end up fighting over everything as they
`think they are the smartest in the room every time.
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`28. Milton personally hired Nikola’s CEO, Chief Financial Officer, and Chief Legal
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`Officer.
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`29.
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`At all relevant times, Milton was Nikola’s primary public spokesman, and he had
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`ultimate control and authority over the company’s social media posts and press releases. Further,
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`Milton often participated in meetings with prospective investors, industry partners, and potential
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`customers.
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`30.
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` Milton was a hands-on executive. He engrossed himself in the details of
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`Nikola’s technology and product development process. He participated in weekly update
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`meetings with senior technical and business leaders. During these meetings, and regularly at
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`other times, he received updates on Nikola’s product development, technology, and commercial
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`activity directly from Nikola’s technical leads. Milton worked with engineers, often huddling
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`with them in front of computer screens to discuss technical matters.
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`31.
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`In fact, Milton was purportedly so central to Nikola’s business that Nikola
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`disclosed in its filings with the Commission in the spring and summer of 2020 the risks
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`associated with its dependence on Milton. Nikola warned in these filings that it is “highly
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`dependent” on Milton’s services, because he is “the source of many, if not most, of the ideas and
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`execution driving Nikola.” Accordingly, Nikola cautioned that if Milton could not continue
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`employment with the company, it “would be significantly disadvantaged.”
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`32. Milton viewed and touted himself publicly as a technological expert in several
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`aspects of electric vehicles. During a May 5, 2020 appearance on the Rise of the Young podcast,
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`Milton claimed:
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`I’m not trying to ever be too confident or – or brag about things, but
`this is important to help you understand that answer. There’s two
`people in this world that know EVs better than anyone, and that’s
`Elon and myself. There’s no one in this world that – I can go into
`any meeting with Volkswagen, Daimler, Volvo. You could put 30
`PhDs in that room, and I would run circles around every one of them.
`Because they only know one thing, that’s all they know. . . . So
`there’s very few people that know the EV industry or the whole
`entire vehicle like I do or like Elon does, so we’re probably the top
`two guys in the world that know this shit, and we know it better than
`anybody.
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`33. Milton managed in a hard-charging, demanding, and intimidating manner. He
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`frequently operated in a silo, making it difficult for Nikola’s technical leads to adjust to decisions
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`he made or projects he initiated. At times, Milton announced company initiatives on Twitter
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`without first consulting with – or even informing – relevant technical or business leads. It was
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`not unusual for Nikola’s engineers, executives, and even marketing personnel to find out about
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`company initiatives, timelines, or product features by reading a Milton tweet or watching him in
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`an interview. For example, on June 25, 2020, Milton sent a series of tweets from his personal
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`account in which he claimed that Nikola would offer a drinking fountain in the Badger. This
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`information came as a complete surprise to Nikola’s designers, engineers, and marketing
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`personnel. When informed of the tweets, one engineer questioned whether “this [is] a joke,” a
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`marketing employee wrote that his “head is fuzzy,” and a designer texted, “[u]hhhhh what.”
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`III. Milton’s Social Media Activity and Fixation with Stock Price
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`34.
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`In the months leading up to and after the Business Combination, Milton pursued a
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`deliberate communications strategy with the intent of creating maximum exposure for himself
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`and Nikola to retail investors to increase and maintain Nikola’s stock price. This strategy
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`consisted of a ubiquitous social media presence coupled with frequent podcast and television
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`appearances.
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`35. Milton used his personal Twitter account (@nikolatrevor) and personal Instagram
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`account (@lakepowelltrevor) to publish material information about Nikola. As of September 15,
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`2020, more than 104,600 users followed Milton on Twitter and more than 36,500 users followed
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`Milton on Instagram.
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`36. Milton repeatedly urged television viewers and podcast listeners to follow his
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`social media accounts, claiming he used them to communicate “accurate data” about Nikola in a
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`way that would enable followers to receive information “way faster than you get it anywhere
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`else.” Milton’s statements on June 30, 2020 during a nationally televised interview on Fox
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`Business encapsulate his view of using social media to interact with Nikola’s investors:
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`Well, I don’t think that the market really – this is I think one of the
`things that many people have missed. The investors around the
`world right now are tired; they’re tired of like an executive sitting in
`an office behind his chair, making millions of dollars and, you know,
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`forgetting about the average factory worker or even the consumer.
`So, there’s unparalleled contact between myself, the executive
`chairman and the founder of Nikola, and all of our fans. I mean, you
`heard in the previous segment about social media, there’s a lot of
`negative in social media, but there’s also a lot of positive that you
`can create with it. And I took the, uh, I took the decision I wanted
`to create the positive . . . . And through this social media experience,
`where people can actually feel like they’re part of it, they can talk to
`you, they can ask you questions, the transparency, the, the market
`they’re just tired of the older executive that just don’t care. And
`that’s why you see the market evaluation of Nikola do well is
`because finally there’s executives out there that they can talk to, that
`they can voice their problems, their opinions with and they actually
`get a response. Go on my Twitter Nikola Trevor and you’ll see . . .
`you’ll literally see answers to probably two thirds of every tweet out
`there.
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`37. Milton exponentially increased his social media activity in anticipation of and
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`after Nikola became a public company in mid-2020. This is illustrated in the following chart that
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`approximates his activity on his personal Twitter account (@nikolatrevor):
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`Year
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`2016
`2017
`2018
`2019
`2020
`TOTAL
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`Approximate Number of
`Tweets (including Replies)
`Per Year
`14
`22
`52
`137
`2,283
`2,508
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`38.
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`To further increase investor awareness of Nikola around the time of the Business
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`Combination, Milton embarked on a self-proclaimed “media blitz.” As part of this campaign, he
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`participated in over a dozen nationally televised interviews and appearances and dozens of
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`podcast appearances. As detailed below, Milton made multiple false and misleading statements
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`during these appearances.
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`39. Milton’s “media blitz” and social media activity was closely connected with his
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`fixation on, and desire to increase and maintain, Nikola’s stock price. Around the time of the
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`Business Combination, Milton became intensely focused on Nikola’s stock price, which was
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`very volatile.
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`40.
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`On days when Nikola’s stock price declined, Milton regularly attempted to direct
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`Nikola’s senior executives to take actions to stop the price decline. Senior executives received
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`frantic phone calls or text messages from Milton on such days in which he urged the executives
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`to “do something.” Milton also spoke of needing to put out “good news” or some kind of
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`announcement “to get people excited” as a way to counteract price declines or maintain support
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`for the stock price.
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`41.
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`For example, following a short period of stock price decline in August 2020,
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`Milton sent a text message to a senior Nikola executive requesting to “talk strategy ASAP.”
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`Milton went on to say that the “continual stock decline is going to erode any confidence in our
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`stock. We have to do something . . . . We can’t just sit here and watch it collapse.” Another
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`time, in late July 2020, Milton contacted a different Nikola senior executive to discuss the
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`possibility of Milton buying shares of Nikola “for the company’s health” because Nikola has had
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`“zero news for two weeks and it’s important to prevent our stock from losing credibility.”
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`42.
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`Senior Nikola executives and some members of Nikola’s Board of Directors
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`impressed upon Milton in the summer of 2020 that volatility in Nikola’s stock price was to be
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`expected, and that his focus should instead be on long-term performance. As the senior
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`executives explained to Milton, Nikola had a relatively small float following the Business
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`Combination due, in part, to a significant portion of the stock being subject to lock-up
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`agreements, resulting in stock price movements being largely driven by retail investors and
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`algorithmic trading firms.
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`43.
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`However, Milton’s focus remained on the stock price and his attempts to
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`influence the retail investors who he viewed as driving it. To that end, Milton tracked the daily
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`number of new Robinhood users who held Nikola stock. On June 8, 2020, Milton shared a tweet
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`with a senior Nikola executive reflecting that over 36,000 new Robinhood users became Nikola
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`stockholders that day. The senior executive responded, in part, by expressing his amazement at
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`how many calls he received “from retail investors today that have no clue about Nikola, other
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`than their friends told them to buy. A lot of hype out there with retail investors,” to which
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`Milton replied: “That’s how you build a foundation. Love it.”
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`44. Milton’s focus on the stock price was not surprising, as he was personally
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`incentivized to push Nikola’s stock price higher. First, as the company’s largest stockholder, he
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`stood to benefit financially if he could increase Nikola’s stock price, and to sustain that increase
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`beyond the six-month period following the Business Combination. During this period, Milton
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`was contractually prohibited, with some exceptions, from transacting in Nikola stock. Second,
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`Milton’s employment agreement following the Business Combination tilted heavily toward
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`equity. For example, Milton and Nikola’s senior executives (who also held significant amounts
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`of Nikola stock) each earned an annual salary of $1, but stood to be paid millions of dollars by
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`participating in the company’s equity incentive plans.
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`45.
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`One part of the equity incentive plan provided that Milton could earn,
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`incrementally, up to 4,859,000 restricted stock units (“RSUs”) as “Performance Awards” if the
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`company’s stock price reached milestones of $25, $40, and $55 per share. Under the
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`employment agreement, the share-price milestones were achieved, and incremental RSU awards
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`were earned, when Nikola’s stock traded at or above a share price milestone for at least 20
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`Case 1:21-cv-06445 Document 1 Filed 07/29/21 Page 15 of 65
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`consecutive trading days during a three-year period. On August 21, 2020, Milton received the
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`maximum award of 4,859,000 RSUs based on reaching these milestones.
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`IV. Milton’s Material Misrepresentations to Investors
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`46.
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`From approximately November 2019 through September 2020, in his capacity as
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`CEO and later as Executive Chairman of Nikola, Milton made materially false and misleading
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`statements on numerous, critical topics related to Nikola’s capabilities, technology, reservations,
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`products, and commercial prospects. The false and misleading statements made during this time
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`period remained in the public domain and accessible to investors and prospective investors
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`through at least September 20, 2020.
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`47. Milton made the false and misleading statements in tweets from his personal
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`Twitter account, posts to his personal Instagram account, tweets from Nikola’s corporate Twitter
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`account, in Nikola press releases, and in television and podcast appearances in which he was
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`identified as Nikola’s CEO or Executive Chairman.
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`48. Milton’s tweets and Instagram posts were published instantaneously to his Twitter
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`and Instagram followers, respectively, and also were publicly available. When tweeting or
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`posting material information about Nikola from his personal accounts, Milton did so in his
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`capacity as CEO or as Executive Chairman of Nikola. Beginning at least as early as June 2020
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`and continuing through September 20, 2020, Milton included the following publicly available
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`bio on his Twitter account: “Founder, Executive Chairman of @nikolamotor Nasdaq traded:
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`NKLA. It’s our duty to leave the world a better place and inspire people. Instagram:
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`lakepowelltrevor.”
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`49.
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`At all relevant times, Milton had the authority to publish, and to cause Nikola to
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`publish, material information about Nikola from its corporate Twitter account (@nikolamotor),
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`Case 1:21-cv-06445 Document 1 Filed 07/29/21 Page 16 of 65
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`without approval from any other person. As of September 15, 2020, more than 81,400 people
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`followed Nikola on Twitter. At all relevant times, Milton also had authority to cause Nikola to
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`publish press releases, and to publish content on Nikola’s website.
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`A.
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`False and Misleading Statements about the Nikola One
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`(i)
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`Capabilities of the Nikola One Semi-Truck
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`50.
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`Nikola began its truck development program in 2016, when it unveiled its first
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`truck prototype, the Nikola One. At a December 2016 unveiling event for Nikola One, Milton
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`repeatedly and falsely stated that the Nikola One was fully functioning. In June 2020, in
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`responding to the publication of an article that questioned the accuracy of Milton’s December
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`2016 statements about the Nikola One, Milton re-adopted the 2016 statements, telling the market
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`– again falsely – that the Nikola One could have been driven in 2016.
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`51.
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`In or around June 2016, Milton began to promote an unveiling event for the
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`Nikola One scheduled for December 1-2, 2016. Nikola invited potential investors, suppliers, and
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`potential customers to the event, and publicized that it would live-stream the event on its
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`website. In the weeks leading up to the event, Milton represented that the Nikola One would be
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`“working” or “functioning.” For example, on October 16, 2016, in response to a question from a
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`Twitter user about whether the December 1, 2016 event would be a “[d]esign unveiling or a
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`functional prototype,” Milton responded, via Nikola’s corporate Twitter account, “functioning.
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`Fully built truck at event.”
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`52.
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`In or about August 2016, however, Milton had pivoted the Nikola One from the
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`original CNG-powered concept to a hydrogen fuel cell vehicle. A fuel cell converts hydrogen to
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`electricity. This fundamental design change ensured that the prototype to be shown at the
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`unveiling event in December would not be operable, as integrating and testing FCEV
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`Case 1:21-cv-06445 Document 1 Filed 07/29/21 Page 17 of 65
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`components would require significant additional time. A few weeks before the event, Nikola’s
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`chief engineer informed Milton that the truck would not be functioning at the unveiling event
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`unless the event was postponed. Milton made the decision to proceed as scheduled with the
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`knowledge that the vehicle to be unveiled would not be functioning.
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`53.
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`The unveiling event was live-s