By Jonathan Stempel
(Reuters) – Nikola (NASDAQ:) founder Trevor Milton, who was sentenced to four years in prison for fraud, must pay $167.7 million to the electric truck maker for making false and misleading statements about the company, a U.S. judge said. the public.
In a ruling Monday, U.S. District Judge Diane Humetewa in Phoenix upheld a split arbitration panel’s November 2023 decision in favor of Nicola.
Humetewa said the panel was acting within its powers to interpret the separation agreement Milton entered into in September 2020 when he stepped down as Nicola’s chief executive.
The panel ordered Milton to pay $121.25 million, or 97%, of Nicola’s $125 million fine and about $46.5 million in legal fees and costs to settle the US Securities and Exchange Commission’s civil fraud case.
Milton, 42, argued the award was excessive and “crude justice” because the panel ignored the “relative culpability” of Nicola’s other executives, directors and employees.
But the judge said the panel’s analysis was persuasive, including assigning 3% fault to the Phoenix-based company for failing to prevent Milton from defrauding investors.
Attorneys for Milton did not immediately respond to requests for comment Tuesday. Nicola’s lawyers did not immediately comment.
A Manhattan jury convicted Milton in October 2022 of two counts of wire fraud and one count of securities fraud after prosecutors said he lied to investors about Nicola’s technology.
Prosecutors attributed Milton’s inappropriate statements to Nikola building a pickup truck “from the ground up,” building batteries he knew he bought elsewhere, and making progress on building a Nikola One semi truck he knew wasn’t working.
Milton is free on bail while he appeals his conviction and December 2023 sentence.
That’s how it works Nikola Corp v. Milton, U.S. District Court, District of Arizona, No. 23-02635.
