Nikola Founder’s Fraud Conviction A Cautionary Tale
Law360
Law360
Ed Imperatore spoke to Law360 about Nikola Corp. founder Trevor Milton’s criminal conviction on charges he misled investors about the electric-truck maker’s business prospects.
According to Ed, statements being made by executives still have to be properly vetted by a team of professionals, including lawyers, accountants, product development specialists, and investor relations experts to ensure that those statements are accurate and that the executives aren’t “ad-libbing or speaking off the cuff.”
He added that the case “took a very basic theory of securities and wire fraud — making misrepresentations to investors — and applied it to a de-SPAC transaction. The evidence in the case apparently showed that Milton chose a de-SPAC transaction because it allowed him to speak to investors during what would have been the quiet period for an initial public offering. Milton's basic defense was that he operated in good faith and that he believed in what he was telling investors, and he saw his statements as being aspirational and forward-looking. The jury, of course, rejected that.”
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