Electric truck startup Nikola disclosed in a regulatory filing Monday it has received subpoenas from the Securities and Exchange Commission and the Department of Justice regarding fraud allegations raised in a short-seller report in early September.
The SEC has also subpoenaed eight Nikola officers and employees and its directors, while both the company and its founder Trevor Milton were issued grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York. The N.Y. County District Attorney’s Office also issued a grand jury subpoena to the company.
“Nikola proactively contacted and briefed the SEC during the quarter regarding our concerns pertaining to a report published by a short seller,” President and CEO Mark Russell told investors during a third-quarter earnings call. “Our council has been in close contact with the SEC and the Department of Justice, and we are fully cooperating with both in their requests for information and documents.”
Disclosure of the subpoenas, all received within September, confirms media reports that multiple regulators were investigating the matters raised by short-seller Hindenburg Research on Sept. 10. “We believe Nikola is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton’s career,” the Hindenburg report states, alleging that Nikola has made false statements about its technology in order to boost its value. Milton has since resigned his post as executive chairman and was replaced by former General Motors Vice Chairman Stephen Girsky.
Nikola has vehemently denied the allegations raised in the Hindenburg report, but it wasn’t enough to stop the company’s stock from dropping nearly 50 percent in just over a week. The company has also had putative five class-action lawsuits filed against it in the wake of the report, according to its regulatory filing.