Nikola said on Thursday it was working with federal regulators to pay a $125 million penalty to settle a charge against its founder, as the electric-truck maker works on ramping up production.
The Securities and Exchange Commission (SEC) had charged Trevor Milton for using social media to repeatedly mislead investors about the company’s technology and capabilities, reaping “tens of millions of dollars” as a result of his misconduct.
Shares of Nikola, which also reported third quarter financial results, were up 13% at $14.38 in early trading.
The company said the settlement, which was yet to be approved by a vote of SEC commissioners, will be paid over two years.
The Phoenix, Arizona-based startup added that it intends to seek reimbursement from Milton for costs and damages in connection with these investigations.
A spokesperson for Milton was not immediately available to comment.
Milton had stepped down as Nikola’s executive chairman last September, two weeks after short-seller Hindenburg Research labeled the company a “fraud” and said it made many misleading statements about its technology.
Subsequently, he was also criminally charged with defrauding investors by lying to them about the company’s products and technology.
As the company works on closing this chapter, Nikola said it had started building pre-series trucks in its Coolidge, Arizona facility and still looks to deliver up to 25 trucks to dealers and customers by December 2021.
In September, Nikola had signed a deal with Germany’s Bosch Group to build Bosch fuel-cell power modules at its facility in Coolidge for two of its trucks powered by hydrogen fuel-cells.
The company also said that it had built seven hydrogen fuel-cell trucks that are being tested in Germany and the United States and will progress to road release by the end of 2021.