The CEO of the company isTrevor Milton.
The Securities and Exchange Commission has accused the electric truck maker of deceiving investors about its products, technical capacity and business prospects.
The SEC hopes the penalty will serve as a warning to all companies that are considering entering the public markets via a merger deal with a SPAC. Officials said that statements from companies hoping to tap public capital markets need to be completely accurate.
The SEC moved to more thoroughly regulate SPACs, also known as blank check companies, in the morning. The new accounting guidance issued by the regulators halted the surge in SPACs. As the year went on, they started surging again. The creation of a social media and streaming company is something that former President Donald Trump wants to create. The SEC is looking into the deal.
In June 2020, the company went public and warned investors that it was likely to be fined. Pre-revenue electric-vehicle startups went public through the company's deals. They followed investor interest in such companies after they became the world's most values automaker by 2020.
The settlement was confirmed by the company on Tuesday and it did not admit or deny the findings from the SEC.
The company said it was pleased to bring this chapter to a close as it had resolved all government investigations.
At least four electric-vehicle startups are under investigation by federal agencies for potentially misleading investors. The others are Canoo and Lordstown.
The company's market value briefly topped that of Ford despite it never producing a single vehicle for sale, as shares of the company soared to nearly $100 last year. The stock closed Monday at $9 a share, down by 7.3%.
The company's founder and former chief executive offer, who pleaded not guilty to fraud charges brought by the Justice Department in July, was responsible for misleading claims.
The SEC said in a press release that before the company made a single commercial product, Milton embarked on a public relations campaign aimed at inflating and maintaining the stock price.
The commission said that his media appearances made investors believe that he had reached certain product and technological milestones that were material information used by many when they agreed to invest in the firm.
The true state of the company's business and technology was portrayed in the false claims made by Milton. The remedies today's settlement provides are strong and merit the harm done to retail investors.
The SEC was fined. The SEC has been talking to Nikola. Mark Russell said last month that the company expected to pay a $125 million penalty to the SEC for misleading investors.
The deal was seen by analysts as a sign that the company was moving past the investigation as well as the resignation of the company's former CEO.
When he took his company public through a blank check company backed by a former GM Vice Chairman, he became an overnight billionaire.
The SEC probe and fine are unrelated to the criminal probe by the Department of Justice. In July, a federal grand jury accused Milton of lying about nearly all aspects of the business to boost stock sales of the electric vehicle start-up.
The government and regulatory investigations will lead to costs and damages being sought by the company.
The SEC opened an investigation after a short-seller accused the company of lying to investors.
