Trevor Milton, the founder of Nikola Corporation, an electric vehicle start-up, has received a presidential pardon from former President Donald Trump, as confirmed by the White House on Friday. This decision arrives after Milton's conviction for fraud in December 2023, where he was sentenced to four years in prison for deceiving investors about the company's technological capabilities.
The pardon, announced late on Thursday, has significant implications. It may negate hundreds of millions of dollars in restitution that federal prosecutors were seeking for defrauded investors. Milton's legal and financial troubles date back to 2020 when his once-promising start-up, which briefly held a market valuation of $30 billion, faced scrutiny and allegations of containing exaggerated claims about its technology. Prosecutors highlighted a notorious promotional video where a Nikola truck appeared to drive down a highway, but was, in fact, a non-functional vehicle that had merely been rolled down a hill.
"They say the thing that he did wrong was he was one of the first people that supported a gentleman named Donald Trump for president," Trump stated in a press conference, arguing that Milton had been unfairly targeted due to his political support. This aligns with reports showing that Milton and his wife contributed over $1.8 million to Trump's re-election campaign merely weeks before the November election, leading to allegations of political influence impacting the legal process.
The fallout from Milton's actions has been considerable. Under his leadership, Nikola filed for Chapter 11 bankruptcy protection in February 2024, citing financial struggles and declining stock valuations. Prior to the bankruptcy filing, the company's stock suffered heavily due to revelations of fraud. Nikola's CEO testified at Milton's trial that his former boss was "prone to exaggeration." Following his conviction, the company settled a civil case with the Securities and Exchange Commission (SEC) for $125 million, without admitting wrongdoing.
In a post on social media platform X, Milton expressed his gratitude, saying, "I am incredibly grateful to President Trump for his courage in standing up for what is right and for granting me this sacred pardon of innocence." He claimed to have received a personal call from the former president informing him of the pardon.
Milton’s legal troubles were significant, with prosecutors alleging he engaged in a scheme to mislead investors by making false statements about Nikola's technology, including claims of operating hydrogen and electric-powered vehicles that he knew were not true. The Justice Department's statement at the time of his sentencing underscored Milton's repeated acts of deception during promotional activities.
As part of his initial sentencing, alongside the prison term, Milton was also fined $1 million and ordered to forfeit property in Utah, while additionally facing three years of supervised release. His legal team had argued that the accusations did not substantiate that Milton's statements were the cause of investor losses.
The Trump administration has faced criticism for its handling of pardons, with this recent decision reviving discussions around the use of clemency powers as a potential avenue for favouritism or political retribution. Milton's pardon not only affects his future but also echoes broader implications for investor trust and accountability in the tech and automotive sectors. Critics highlight that this scenario illustrates how political connections may afford individuals in high-stakes industries immunity from the consequences of wrongful actions, potentially eroding public confidence in both the financial and legal system.
As the electric vehicle industry continues to evolve, the fallout from the Nikola saga serves as a cautionary tale, reminding stakeholders of the delicate balance between innovation and accountability in entrepreneurship.
Source: Noah Wire Services