Nikola expects $125 million SEC penalty under proposed resolution

Nikola Motor Company

Source: Nikola Motor Company

Embattled electric truck maker Nikola expects to incur a civil penalty of $125 million under a potential resolution with the Securities and Exchange Commission regarding the company misleading investors.

The company Thursday said it has “been engaged in discussions regarding a resolution” to the probe that, if approved, would include a $125 million civil penalty paid in installments over time. The deal is contingent on a vote of the SEC commissioners, Nikola said in a release.

The SEC did not immediately respond for comment.

The SEC opened the investigation following short-seller Hindenburg Research accusing the company and its founder and CEO Trevor Milton of lying to investors about Nikola’s business and technologies.

The SEC probe is separate from one by the Department of Justice as well as criminal fraud charges against Milton that were announced in June. A federal grand jury accused Milton of lying about “nearly all aspects of the business” to bolster stock sales of the electric vehicle start-up

Separately, Nikola said it will seek reimbursement from Milton for costs and damages in connection with the government and regulatory investigations. In 2020, Nikola paid about $1.5 million of Milton’s legal fees.

The actions were announced in conjunction with the company reporting its third-quarter results, including an adjusted 22-cent loss per share that was narrower than the 28-cent loss expected by analysts compiled by Refinitiv.