Jury selection begins in US trial of Nikola founder Trevor Milton

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NEW YORK, Sept 12 (Reuters) – The U.S. fraud trial of Trevor Milton, founder and former chief executive of Nikola Corp (NKLA.O) who prosecutors accuse of lying to investors about the electric truck maker and hydrogen, began Monday in New York with jury selection.

Prosecutors said Milton sought to mislead investors about the company’s technology beginning in November 2019. He left the company in September 2020 after a report by short seller Hindenburg Research called the company of “fraud”.

Milton, 40, pleaded not guilty to two counts of securities fraud and two counts of wire fraud in federal court in Manhattan. His lawyers said they would argue that Milton had no intention of defrauding investors and that other senior Nikola executives, including his general counsel, endorsed Milton’s statements.

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On Monday, U.S. District Judge Edgardo Ramos told an initial group of about 80 potential jurors they should be prepared to sit for five weeks if selected. The panel will include 12 jurors and four alternates, Ramos said.

Milton was indicted last year. Prosecutors said he made false claims about Nikola’s progress in developing its technology as the company joined the growing number of tech and electric vehicle companies going public through acquisition vehicles special purpose, or SPAC.

Prosecutors said Milton’s inappropriate statements included that Nikola built an electric, hydrogen-powered “Badger” pickup truck from scratch, developed batteries in-house that he knew he was buying elsewhere, and had quickly managed to create a “Nikola”. A” tractor-trailer he knew was not working.

Milton’s statements on social media and in podcasts targeted retail investors who piled into the stock market during lockdowns related to the COVID-19 pandemic, they said. Milton is also accused of defrauding the seller of a Utah ranch, who said in a civil lawsuit that he accepted stock options from Nikola as part of the purchase price on the basis of the former CEO’s claims about the company.

Nikola has spent more than $20 million on Milton’s legal defense so far, according to his public filings.

The company went public in June 2020 through a reverse merger with VectoIQ Acquisition Corp. Nikola’s market value topped $33 billion that month, but has since fallen below $3 billion.

Nikola agreed in December to pay $125 million to settle U.S. Securities and Exchange Commission allegations that the company defrauded investors by misleading them about its products, technical advances and business prospects.

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Reporting by Jody Godoy; Additional reporting by Luc Cohen; Editing by Will Dunham and Grant McCool

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