Nikola's Milton Just Hired Elon's Lawyers
Nikola's Milton Just Hired Elon's Lawyers
Nikola's Trevor Milton has hired the same lawyers who defended Elon Musk in his securities fraud conviction in 2018. Of course few lawyers helped Elon more than ex SEC chair Jay Clayton.
Oh look. Trevor Milton, ousted Nikola Corp (NKLA US) CEO now arrested for fraud, just hired the same lawyers who defended Elon Musk in his securities fraud conviction back in 2018.
Makes sense. Recall how remarkably easy the SEC was on Elon was at the time, even though his fake $420/share buyout cost Tesla's investors billions in evaporated market cap.
I compared Milton's troubles with Elon's in Nikola’s Troubles And Tesla’s History Shadow Battery Day, 9/21/20):
Like Milton, Musk was forced to step down as chairman of his own company as part of pleading guilty to securities fraud after he lied in August 2018 about a fake buyout of Tesla with "funding secured" (see Musk Fought the Law and the Law Won, So What? on 9/29/18). Musk cost Tesla investors more than $20 billion in evaporated market cap as the stock plunged after his stunt was revealed. However Musk, one of the richest people on the planet, paid only a modest $20 million fine.
A key difference between Tesla and Nikola seems to be that Nikola's board apparently exercised its fiduciary responsibility to protect the company and its investors from a damaging and potentially corrupt CEO. More importantly, Nikola's board had the power to make its actions stick, "encouraged" no doubt by General Motors Co (GM US) which is Nikola's new $2 billion best friend.
Tesla's sycophantic Board has been virtually useless as Musk defied the SEC, US Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), the National Transportation Safety Board (NTSB), court orders and law enforcement, and so on—with impunity.
Meanwhile, Tesla's cars and solar roofs have a disturbing propensity to catch fire. At best they remain plagued with persistent quality and reliability problems. Tesla's factories are more dangerous for its workers versus plants operated by all its top competitors combined (see The Trouble With Tesla's Arrested Development on 7/17/19). Regulators are investigating ongoing Autopilot-related injuries and deaths and Smart Summon which Consumer Reports declared an expensive "science experiment" that was "glitchy" that worked "intermittently, without a lot of obvious benefits for consumers."
Nikola’s Troubles And Tesla’s History Shadow Battery Day, 9/21/20
Of course, that SEC was run by the amenable Jay Clayton.
Few lawyers have been more helpful to Elon Musk than Jay Clayton, given his astonishing leniency over the fake buyout as well as Elon's atrocious behavior and glaring dismissiveness of the terms of his conviction and his relentless animosity toward the SEC in particular. This has ranged from telling CBS 60 Minutes "I want to be clear. I do not respect the SEC. I do not respect them" to tweeting an implied reference to a sex act: “SEC, three letter acronym, middle word is Elon’s.”
As I wrote in Nikola's Ex CEO Trevor Milton Arrested for Lying to Investors. Some Ask, "What About Elon?":
"The SEC Musk was defying was chaired by Jay Clayton, a Trump appointee who, in his former life, defended clients mired in corporate shenanigans, including Deutsche Bank (DBK GR), UBS Group AG (UBSG SW), Volkswagen (VOW GR), Softbank Group (9984 JP), The Weinstein Company, Bill Ackman’s Pershing Square Capital Management, and Valeant Pharmaceuticals."
Maybe Milton should hire the more like-minded Jay Clayton.
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