Breaking News -TREVOR R. MILTON meets SEC -update # 1USAO-SDNY INDICTMENT now INCLUDED -update #2 Nikola July 22, 2021 SEC filing
engaged in a fraudulent scheme to deceive retail investors about Nikola’s products, technical advancements, commercial prospects for his own personal benefit in violation of the federal securities
In Q4 of 2020, Nikola disclosed it had been served Grand Jury Subpoenas from the SEC and DOJ, this SEC disclosure is mandatory pursuant to the Securities Exchange Act - I now refer you to Nikola’s November 8, 2020 Form 10-Q, pages 22-24 -which reads in part:
On September 14, 2020, the Company and five of its officers and employees received subpoenas from the SEC as part of a fact-finding inquiry related to aspects of the Company's business as well as certain matters described in a report issued on September 10, 2020 by Hindenburg Research LLC (the “Hindenburg Report”).
The SEC issued subpoenas to another three of the Company's officers and employees on September 21, 2020.
The SEC issued subpoenas to Nikola’s directors on September 30, 2020.
The Company and Trevor Milton also received grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York on September 19, 2020. The Company also received a grand jury subpoena from the N.Y. County District Attorney’s Office on September 21, 2020. The Company has cooperated, and will continue to cooperate, with these and any other regulatory or governmental requests.
also Nikola’s recent statement is completely misleading.,, see Update # 2 at the bottom of this article.
“Trevor Milton resigned from Nikola on September 20, 2020 and has not been involved in the company’s operations or communications since that time. Today’s government actions are against Mr. Milton individually, and not against the company. Nikola has cooperated with the government throughout the course of its inquiry. We remain committed to our previously announced milestones and timelines and are focused on delivering Nikola Tre battery-electric trucks later this year from the company’s manufacturing facilities.
The opening paragraph is just brutal:
Trevor R. Milton, the founder, largest stockholder, and former Chief Executive Officer and Executive Chairman of Nikola Corporation (“Nikola”), a publicly traded company, engaged in a fraudulent scheme to deceive retail investors about Nikola’s products, technical advancements, and commercial prospects for his own personal benefit in violation of the federal securities laws. Milton did so primarily by leveraging his social media presence and frequent appearances on television and podcasts to flood the market with false and misleading information about Nikola.
Over the course of several private offerings, and then in connection with a business combination with a special purpose acquisition company (“SPAC”), Nikola raised more than $1 billion dollars, most of it from institutional investors.
After entering into a business combination with the SPAC, Nikola began trading on the Nasdaq Global Select Market (“Nasdaq”).
…Milton presented himself as a different type of CEO – one who “cared” and was “transparent” with the average investor. As part of his publicity campaign, Milton encouraged prospective investors to follow him on social media to get “accurate information” about the company “faster than anywhere else.” In reality, however, Milton used his platform to mislead investors, which helped inflate and maintain Nikola’s stock price…Milton repeatedly made false and misleading statements about core aspects of Nikola’s products, technological advancements, and commercial prospects…
Badger? Like the “honey badger” - “billions and billions and billions and billions”
Good lord - the SEC proffers a truncated list of the material and substantive misrepresentation, misleading claims and just pathological lies Milton saturated online, by leveraging his Twitter and Instagram Accounts. Wow. Just. Wow
SEC takedown of Trevor Martin - brutal
Milton violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. The Commission seeks (i) permanent injunctive relief; (ii) disgorgement of illgotten gains and prejudgment interest thereon; (iii) civil penalties; (iv) an officer and director bar; and (v) such further relief the Court may deem just and appropriate.
Once the USAO-SDNY unseals the Indictment - I will update but for my former Twitter followers -y’all remember the threads upon thread upon threads, like in late 2020, right? Well it turns out someone was right and someone(s) were wrong. I’ll leave you to make your own deductions —plus I gotta shove a sandwich in my mouth before my 12:35PM conference call. Who the bleep schedules a call at lunch time?
Update USAO-SDNY TREVOR MARTIN INDICTMENT
USAO-SDNY - the Government alleges that Martin made numerous false and misleading statements that “impacted every part of Nikola’s business” Defendant Trevor Milton, the founder of Nikola, has been charged with fraud and for making false and misleading statements to investors. Which induced investors to invest in Nikola
From at least in or about November 2019 up through and including at least in or about September 2020, TREVOR MILTON engaged in a scheme to defraud investors by inducing them to purchase shares of Nikola Corporation (“Nikola”), the electric- and hydrogen-powered vehicle and energy company that MILTON founded, through false and misleading statements regarding Nikola’s product and technology development. MILTON’s scheme targeted individual, non-professional investors – so-called “retail investors” – by making false and misleading statements directly to the investing public through social media and television, print, and podcast interviews.
Largely reiterative of the SEC’s complaint
Prosector itemize the various false and misleading statements made by Martin on social media, TV interviews, and other multimedia, he essentially flooded the information zone with false and misleading statements, intentionally and knowingly
Some investors lost their life savings and/or retirement accounts because they believed Martin’s false and misleading comments and some investors sought loans (using their retirement accounts as collateral) to obtain loans to invest in Nikola
MILTON made these false and misleading statements regarding Nikola’s products and capabilities to induce retail investors to purchase Nikola stock. Among the retail investors who ultimately invested in Nikola were investors who had no prior experience in the stock market and had begun trading during the COVID-19 pandemic to replace or supplement lost income or to occupy their time while in lockdown, and some of the retail investors that MILTON’s fraudulent scheme targeted suffered tens and even hundreds of thousands of dollars in losses, including, in certain cases, the loss of their retirement savings or funds that they had borrowed to invest in Nikola. Moreover, MILTON took advantage of the fact that Nikola went public by merging with a Special Purpose Acquisition Company or “SPAC,” rather than through a traditional IPO, by making many of his false and misleading claims during a period where he would have not been allowed to make public statements under rules that govern IPOs.
Res ipsa loquitur…
Also I think a reporter should pull up Nikola’s recent SEC filing and look at who the signatory was circa March & June 2021 - just saying
-I really have to get back to my J-O-B because that’s what adults do - they work
Update # 2 -Nikola’s July 22, 2021 SEC Form S1
3:55PM July 29, 2021 —earlier in this article I stated that Nikola’s July 29, 2021 statement wasn’t exactly true. I now present to you the actual July 22, 2021 Nikola’s SEC Form-S1 filing. It is really frustrating reading some of the woefully incomplete reporting by major news outlets, when they too have the same access to the SEC filings that I do.
There is nothing and I mean nothing magical or mystical about the July 22, 2021 Nikola FORM S-1 filing (General form for registration of securities under the Securities Act of 1933 Acc-no: 0001193125-21-221957) It’s 100% in the public domain. The distinction is knowing where to find these public documents and then understanding (or knowing) what to look for and the important disclosures.
Nikola & Defendant Martin’s Standstill Provisions September 2020 and Social Media Policies;
Because as you’ll note both the indictment (USAO-SDNY) and Complaint (SEC) both court filings repeatedly referenced how Defendant Milton used his social media accounts to essentially proliferate “false and misleading statement” which ultimately induced some investors to invest, resulting in the loss of hundreds of thousands and possibly (collectively speaking) tens of millions
Our internal policies and procedures regarding social media have not been, and may not in the future be, effective in preventing the inappropriate use of social media platforms, including blogs, social media websites and other forms of Internet-based communications. These platforms allow individuals access to a broad audience of consumers, investors and other interested persons… use of social media over recent years has increased the volume and speed at which negative publicity arising from these events can be generated and spread, and we may be unable to timely respond to, correct any inaccuracies in, or adequately address negative perceptions arising from such coverage.
As of June 30, 2021, Trevor R. Milton, our founder and former executive chairman, beneficially owned, directly or indirectly, approximately 20.1% of our outstanding common stock. In connection with his departure in September 2020, for a period of three years from September 20, 2020, Mr. Milton has agreed to certain standstill provisions - agreeing not to;
(i) acquire ownership (beneficial or otherwise) of more than 19 million shares of our outstanding common stock in the aggregate, together with shares held by his affiliates and associate
(ii) propose or effect any extraordinaryntransaction with respect to us, (iii) solicit any proxy or consent with respect to the election or removal of directors or any other proposal,
(iv) seek representation on our board of directors or the removal of any member of our board of directors, or
(v) submit any stockholder proposal. In addition, for a period of three years from September 20, 2020, Mr. Milton has agreed to vote his shares of our common stock (x) in favor of the slate of directors recommended by our board of directors at any meeting of our stockholders and (y) against the election of any nominee for director not recommended and nominated by our board of directors for election at such meeting.
These standstill and voting restrictions could have the effect of delaying or preventing a change of control or changes in management and will make the approval of certain transactions difficult or impossible without the support of our executive officers and directors and their affiliates.
N.Y. County District Attorney’s Office Grand Jury subpoenas
For Example - I’m not sure why most overlooked the N.Y. County District Attorney’s Office Grand Jury subpoenas too - Nikola’s SEC filings spell ot out in both particularity and specificity: I now refer you to page (marked) 11 but actually page 15 of the SEC Form-S1
September 2020, Nikola and our officers and employees received subpoenas from the SEC as part of a fact-finding inquiry related to aspects of our business as well as certain matters described in an article issued on September 10, 2020 by Hindenburg Research LLC, or the Hindenburg article.
SEC issued subpoenas to our directors on September 30, 2020. In addition, Nikola and Trevor R. Milton also received grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York and the N.Y. County District Attorney’s Office in September 2020.
“We have cooperated, and will continue to cooperate, with these and any other regulatory or governmental requests. We have incurred significant expenses as a result of the regulatory and legal matters relating to the Hindenburg article. The total cost associated with these matters will depend on many factors, including the duration of these matters and any related finding”
I know that some of my readers/followers might be sick of me pointing out various SEC filings. From 2017 thru 2021 when I was on Twitter I consistently stated that SEC filings contain a lot of factual information and that if you want to really know what kind of shitscreek a company is in, simple read their SEC filings. On page (marked) 96 there are so many facts to unpack here.
For Example:
We also received a grand jury subpoena from the N.Y. County District Attorney’s Office on September 21, 2020. On October 16, 2020, the N.Y. County District Attorney’s Office agreed to defer its investigation; it has not withdrawn its subpoena issued to us, but has informed us that no further productions are necessary at this time.
October 28, 2020, The Nasdaq Stock Market LLC, sought informational updates from Nikola. Specifically “the status of the Staff of the Division of Enforcement and SDNY inquiries”
March 24, 2021, the Staff of the Division of Enforcement issued an additional subpoena related to our projected 2021 cash flow and anticipated use of funds from potential 2021 capital raises.
Pay attention because this is extremely important…
And I’m going to break this down in non-legalese, in short Nikola retained the services of Kirkland & Ellis. Frankly it was a pretty smart move but this could be a collision course of Attorney Client Privilege and what is especially problematic is no where in Nikola’s July 22, 2021 SEC-Form S-1 do I see that they disclosed that they waived “privilege” …this isn’t about semantics —this is about analyzing Nikola’s filings and disclosure… Yes you can argue that Nikola’s waiver is implied because they complied with (at least) 4 subpoenas but I’ll bet you (see the text I bolted below) that the underlying issue is Nikola gave Kirkland & Ellis four years with of “employee text messages, documents in our data room and other corporate documents” because if Nikola, as it suggests has been fully cooperative with Federal and State investigators why didn’t they hand that information over sans subpoena? Moreover did you notice Nikola’s use of past tense of “had” or “was also given access”
Kirkland & Ellis had full access to our data, emails and documents for collection and review. No request by Kirkland & Ellis for information from us was denied. Kirkland & Ellis was also given access to data contained on personal devices for over three dozen of our employees. Kirkland & Ellis, including with the assistance of contract attorneys, reviewed relevant documents in the legal, investor relations, finance, and human resources areas as well as our emails from January 1, 2016 through December 31, 2020, employee text messages, documents found in our data room and other corporate documents.
Nikola & Defendant Milton’s Indemnification Agreement
It seems odd to me that I have yet to find any public reporting that Nikola & Defendant Milton ratified an Indemnification Agreement and boy is it costing Nikola a lot of money, fiduciary duty something something. For Example:
Q4 2020 and Q1 2021 Nikola is paying Defendant Milton’s legal expenses: $11,000,000.00 plus $3,900,000.00 plus $6,600,000.00 =$21,500,000.00
I mean it’s right there in black and white in Nikola’s July 22, 2021 SEC Form S-1 filing - no really it’s there in plain text👇🏻
The legal and other professional costs we incurred during the first quarter of 2021 and fiscal year 2020 in connection with the Internal Review and disclosed elsewhere in this prospectus include approximately $3.0 million and $8.1 million, respectively, expensed for Mr. Milton’s attorneys’ fees under his indemnification agreement.
As of March 31, 2021 and December 31, 2020, we accrued approximately $3.9 million and $6.6 million, respectively, in legal and other professional costs for Mr. Milton’s attorneys’ fees under his indemnification agreement. We expect to incur additional costs associated with the Staff of the Division of Enforcement and the SDNY investigations and the Internal Review in fiscal year 2021, which will be expensed as incurred and which could be significant in the periods in which they are recorded.
The lack of actual fiduciary duty by the current Nikola Board of Directors is absolutely astounding. And yes I get it —for most individuals reading a 250+ page SEC filing is like reading a foreign language but the goal of my (albeit prolific) highlights and underling is me saying “yo…pay attention this is actually important” - For Example not only did Nikola & Defendant Milton agree to an indemnification agreement but as part of Defendant Milton’s “separation agreement”
…compensation of $16.5 million for the award
In September 2020, we entered into a separation agreement with our former executive chairman which resulted in a modification of his 600,000 time-based restricted stock units and cancellation of all market-based performance restricted stock units. The modification resulted in us recognizing total stock-based compensation of $16.5 million for the award
…daddy loves me more -William “Bill” Milton-
If you think Nikola’s current President Mark Russell isn’t a target of the ongoing criminal investigation or that Trevor’s daddy isn’t a target of the ongoing investigation - or that they won’t help Trevor - apologies for bursting your bubble - I now refer you to a 2019 Trucks.com Article
The hurdles of those early years formed him and laid the foundation for his successes today, Milton, who isn’t shy about his accomplishments, told Trucks.com.
“I won the lottery when it came to parents,” he said. He credits the examples of his father, Bill Milton, a retired Union Pacific Railroad manager, and his Realtor mother, Sally, for his drive and fortitude.
“He has obsessive focus,” said Mark Russell, a longtime Milton mentor who recently signed on as Nikola’s president. Milton was a customer of Russell’s prior company, Worthington Industries.
‘VISION’
“He can extrapolate and form new patterns,” Russell said. “It’s what the rest of us call vision.” Milton often learns by going into the field and asking questions, Russell said.
And now I refer you to page (marked) 125 of Nikola’s July 22, 2021 SEC Form S-1 - which reads in part:
Legacy Nikola entered into a fourth amended and restated stockholder agreement dated September 30, 2019, or the Stockholder Agreement, which granted rights to certain holders of its stock, including (i) M&M Residual is controlled by Legacy Nikola’s Chief Executive Officer, Trevor R. Milton, (ii) OTW STL LLC, of which William Milton, previously a member of the Legacy Nikola’s board of directors, is a member, (iii) WI Ventures, LLC, Nimbus Holdings LLC, Green Nikola Holdings LLC, and CNHI…
Mark A. Russell, Legacy Nikola’s President and (viii) T&M Residual LLC, or T&M Residual, which is controlled by Trevor R. Milton and Mark A. Russell, or, collectively, the Agreement Parties.
So when I casually stated that Nikola’s statement wasn’t exactly accurate -Nikola entered into various agreements with Defendant Milton - check out the month of termination for “Transactions with Executive Officers“
Private Jet & Solar Panels…
In 2019, Legacy Nikola entered into an aircraft charter arrangement with Mr. Milton to reimburse him for the flight hours incurred for company use on his personal aircraft. These flight hours were related to business travel by Mr. Milton and other members of the executive team. We recognized expense of $1.6 million for the year ended December 31, 2020 for the business use of the aircraft. The aircraft charter arrangement was terminated effective October 2020.
We recognized $0.2 million for the provision of solar installation services to Mr. Milton for the year ended December 31, 2020. Mr. Milton paid forthese services and, as of December 31, 2020, we had no outstanding balances in accounts receivable related to solar installation services. Solar installation services were terminated effective October 2020.
Nikola’s Agreement with Defendant Trevor Milton - again fiduciary duty something something because based on a review of Nikola’s July 2021 SEC filing —it certainly appears the rot that is Nikola is at the core of Milton’s handpicked leadership. So yes you’ll excuse me while I roll my eyes at their incredibly misleading “statement” concerning the Indictment of their former Founder and CEO …I think Trevor’s Daddy and BFF are absolutely targets of the ongoing criminal investigation
“..consideration for his consulting services, we agreed to pay Mr. Milton $10.0 million on each of the first and second anniversaries of the termination date. In the event of such Involuntary Termination and subject to Mr. Milton’s delivery of an effective release of claims and ongoing compliance with certain post termination restrictive covenants, including two year non-compete and non-solicit covenants and a mutual non-disparagement covenant, all of Mr. Milton’s unvested equity awards, including his performance-based stock award, were to accelerate in full..”
And if you want to truly know what’s going on with a publicly traded company -all you have to do is read their SEC Filings
Based on a Form 4 filed jointly on June 1, 2021, by Trevor R. Milton and M&M Residual. Consists of 600,000 shares held by Mr. Milton and 79,049,795 shares held by M&M Residual, including 2,151,642 shares subject to options held by certain employees pursuant to the Founder Stock Option Plan, including 930,797 options held by Mr. Pike and Mr. Worthen. M&M Residual is wholly-owned by Mr. Milton and Mr. Milton has sole voting and dispositive power over shares held by M&M Residual. The business address of this stockholder is P.O. Box 50608, Phoenix, AZ 85076.
The two filings discussed in this Article
Nikola’s July 22, 2021 SEC Form S-1 -highlighted and annotated copy:
i leave to go take out the garbage and BAM! Breaking News. Filey is on top of the everything and also working at her J-O-B. Sheesh you're awesome
*chants in cheerleading voice towards Trevor on the bench* YOU CANT DO THAT 👏👏👏👏👏YOU CANT DO THAT 👏👏👏👏👏YOU CANT DO THAT 👏👏👏👏👏