Nikola reserves $125 million to fund potential settlement with SEC

(Reuters) -Nikola Corp said on Thursday it had reserved $125 million to fund a potential settlement with the U.S. Securities and Exchange Commission, related to the regulator’s charge against the electric truck maker’s founder for misleading investors.

The SEC said in July it had charged Trevor Milton, who founded Nikola in 2015, for “repeatedly disseminating false and misleading information.”

The commission alleged Milton used his social media platform to repeatedly mislead investors about the electric vehicle maker’s technology and capabilities, reaping “tens of millions of dollars” as a result of his misconduct.

“With prospects of an SEC settlement, we’re looking forward to resolving the outstanding issues relating to our founder and bringing that chapter to a close,” Nikola Chief Executive Officer Mark Russell said in a statement on Thursday.

A spokesperson for Milton was not immediately available to comment.

The company has been working with the SEC and expects that, if approved, the resolution would include a $125 million civil penalty paid in installments over time.

The Phoenix, Arizona-based startup added that it intends to seek reimbursement from Milton for costs and damages in connection with the government and regulatory investigations.

Shares of the company were up 4.2% at 13.25 in early trading.

(Reporting by Subrat Patnaik in Bengaluru; Editing by Shailesh Kuber)

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