Nikola Founder Trevor Milton's Lawyers Seek Probation To Avoid Client Going To Jail, Claim Company Is 'Real' Unlike Elizabeth Holmes' Theranos

Convicted founder of electric truck maker Nikola Corp (NASDAQ:NKLA) Trevor Milton, is reportedly making a bid to avoid jail time, with his legal counsel asserting that Milton’s case doesn’t align with that of Theranos founder Elizabeth Holmes, who was also convicted for fraud.

What Happened: Milton’s lawyers have proposed probation instead of imprisonment during his sentencing, which is scheduled for November 28, reported Reuters.

In October 2022, a federal jury in Manhattan found Milton guilty of two counts of wire fraud and one count of securities fraud. The prosecution painted Milton as a “con man,” accusing him of misleading investors about the electric and hydrogen-powered truck maker’s technology.

As per the report, Milton’s attorneys claimed that there is “not a shred of evidence” indicating that he had any malicious intent. Instead, they said that any false statements were the result of Milton’s unwavering faith in his Phoenix-based company.

As per the report, Milton’s legal team also sought to distinguish his case from that of Elizabeth Holmes, arguing that unlike Theranos which was touted as a breakthrough health technology company when it had no successful product, Nikola is a “real company with real products.” They further suggested that Holmes’ lies posed a risk to people’s health, which isn’t applicable in Milton’s case.

Why It Matters: Milton founded Nikola in 2015. The company was listed on Nasdaq in 2020 by merging with a SPAC called VectoIQ Acquisition Corporation. 

In the recent third quarter, Nikola's gross loss bloated to $125.5 million from $30.2 million a year earlier, while the expanded adjusted EBITDA loss widened to $188.6 million from $107.9 million. Adjusted EPS loss of 30 cents was greater than the feared 14 cents. 

After several incidents of fire were reported with Nikola battery electric trucks (BEV) since June, Nikola issued a recall for all the vehicles in the market between dealers and customers in August.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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