Yet Nikola went public in June 2020 in a $700 million merger with a SPAC called VectorIQ.
Some young, untested businesses have opted to merge with SPACs because doing so is usually faster, requires fewer disclosures and attracts less scrutiny from investors and regulators than a conventional initial public offering. Nikola, for example, managed to go public just five years after Mr. Milton founded it.
“In carrying out his fraudulent scheme, Milton exploited features of the SPAC structure,” Audrey Strauss, the U.S. attorney in Manhattan, said Thursday.
Federal prosecutors contend that retail investors were hurt by the stock’s sharp drop, which started last summer, but not early investors in the company, including Mr. Milton. Nikola’s shares were trading at about $13 Thursday afternoon, down about 8 percent for the day, after falling from more than $65 in the middle of last year, a point at which the company had a valuation in excess of Ford Motor’s.
The S.E.C.’s complaint said that Mr. Milton held approximately 25 percent of Nikola’s stock after the SPAC deal and “ultimately reaped tens of millions of dollars in personal benefits as a result of his misconduct.” Securities regulators noted that Mr. Milton “embarked on a relentless public relations blitz aimed at a class of investors he called “Robinhood investors” — a reference to the popular retail brokerage that just raised $2.1 billion in its own initial public offering.
A lawyer for Mr. Milton could not immediately be reached for comment. He was scheduled to appear for a bail hearing in federal court on Thursday in Manhattan.
Nikola said in a statement that Mr. Milton had not been involved with the company since resigning in September 2020. “Today’s government actions are against Mr. Milton individually, and not against the company,” the company said. “Nikola has cooperated with the government throughout the course of its inquiry.”
Mr. Milton, who dropped out of high school and college, started Nikola with the aim of becoming the Tesla of trucking. Like Elon Musk, the Tesla chief executive, Mr. Milton cultivated a reputation as a charismatic showman with a grand vision for revolutionizing an industry. “We’re going to completely control trucking in America,” he told Automotive World last year.