Electric truck maker Nikola (NASDAQ:NKLA) has agreed to pay the Securities and Exchange Commission $125 million to settle charges that it defrauded investors by misleading them about its products, technical capacity and business prospects.
SEC officials said they hoped the penalty would serve as a warning to all companies hoping to enter public markets via a merger deal with a special-purpose acquisition company, or SPAC. Specifically, officials said statements from companies hoping tap public capital markets need to be wholly accurate.
The action, announced Tuesday morning, marked the SEC’s most recent move to more thoroughly regulate SPACs, which are also known as "blank check companies." The regulator issued new accounting guidance in the spring, effectively halting a surge in SPACs at the time.
Nikola, led by Trevor Milton (pictured above) on Tuesday confirmed the settlement and said in a statement that it neither admits nor denies the findings from the SEC.
"We are pleased to bring this chapter to a close as the company has now resolved all government investigations," the company said.
The SEC said Nikola agreed to continue cooperating with "ongoing litigation and investigation."
Nikola was one of at least four electric vehicle start-ups under investigation by federal agencies about potentially misleading investors. The others include Lucid, Lordstown Motors and Canoo.
Shares of Nikola soared to nearly $100 last year and the company’s market value briefly topped that of Ford (NYSE:F) despite it never producing a single vehicle for sale. Nikola’s stock closed Monday at $9.25 a share, down by 7.3%. It opened Tuesday up 16 cents, or 1.7%, to $9.41.
