On September 9, 2026, Judge Steven P. Logan of the District of Arizona granted Pomerantz’s motion for summary judgment in a securities fraud litigation against Nikola Corporation founder and former Executive Chairman, Trevor Milton, and denied motions for summary judgment filed by Nikola’s former Chief Executive Officer and Chief Financial Officer.
The action is brought on behalf of investors who purchased stock in Nikola, an electric vehicle manufacturer that went public on June 4, 2020 via a special purpose acquisition company (SPAC) transaction. The complaint alleges that Nikola, Milton and other officers and directors violated section 10(b) of the Securities Exchange Act as well as section 20(a), the “control person” provision, by issuing false statements concerning essentially every aspect of the company’s business.
During the relevant period, Nikola purported to be a producer of zero emissions vehicles, including hydrogen fuel cell electric vehicles (FCEVs) and battery electric vehicles (BEVs), as well as hydrogen fuel for FCEVs. While the complaint alleges that the defendants’ fraud spanned numerous topics touching on every aspect of Nikola’s business, in essence the fraud can be broken down into three main categories of misrepresentations.
First, Nikola claimed it had developed a fully operational “zero emissions” Nikola One tractor trailer truck as well as an FCEV/BEV pickup truck, the Badger. In truth, the Nikola One was an empty shell that was incapable of moving under its own power and the company had long ago abandoned its production. And the Badger was nothing more than a preliminary digital rendering of the vehicle. Second, Nikola claimed it had over 14,000 binding purchase orders for its trucks, which represented “billions and billions” in revenue. In truth, essentially all the orders were non-binding and were for the inoperable, and since abandoned, Nikola One. Third, Milton repeatedly asserted that Nikola was producing hydrogen at less than a quarter of the cost industry experts believed was possible. In truth, Nikola had never produced any hydrogen at all, let alone at the low prices claimed.
Pomerantz alleges that the defendants were motivated by greed. Milton—the architect of the fraud—aimed to inflate the expectations and stock price of Nikola, utilizing the resulting excitement to secure partnerships with top auto companies, which would further inflate Nikola’s share price. As Nikola’s single largest shareholder, Milton openly admitted within the company that he planned to dump his shares as soon as he was contractually permitted, which was only six months after Nikola went public and before the market could discover that the company, like the Nikola One, was an empty vessel. The other defendants encouraged Milton to utilize social media to engage directly with retail investors. Despite knowing of his propensity to lie, they championed Milton’s self-described “media blitzes” of misinformation because they, too, were large shareholders who stood to gain millions, if not billions, from Milton’s fraud.
Investors began to learn the truth when Nikola’s stock price plummeted following a September 10, 2020, Hindenburg Research report. Having gathered “extensive evidence—including recorded phone calls, text messages, private emails and behind-the-scenes photographs,” Hindenburg identified “dozens of false statements by [Milton],” which had led Hindenburg to conclude that Nikola “is an intricate fraud built on dozens of lies over the course of … Milton’s career.” Thereafter, the DOJ and SEC began investigations, Nikola’s partners pulled out, and Milton was forced to resign. Milton was later indicted for, and convicted of, fraud. Nikola’s stock price plummeted 76% over the course of these disclosures and the company filed for Chapter 11 bankruptcy protection in February 2025.
On March 27, 2025, before an order of restitution was entered by the criminal court, President Donald Trump granted Milton a full and unconditional pardon. Milton served no prison time and was not required to pay restitution to his victims. As a result, Pomerantz’s civil class action was the only remaining hope for recovery for investors.
After five years of litigation, which included defeating multiple motions to dismiss, obtaining class certification as well as extensive fact and expert discovery, both the defendants and the investor class moved for summary judgment. The CEO and CFO defendants argued, as is common in securities class actions, that the evidence obtained during discovery was insufficient as a matter of law to prove that (i) their statements, when read in context, were materially false and misleading, (ii) they made the statements with an intent to mislead investors, (iii) they participated in Milton’s scheme to defraud investors, (iv) their statements caused any loss to investors, and (v) they had control over Milton and his false statements. The Court rejected each of these arguments in turn, stating that the plaintiffs had presented sufficient evidence of each for a reasonable jury to find in the plaintiffs’ favor.
The considerably more extraordinary, rare result is the Court’s granting of Pomerantz’s motion for summary judgment on all elements of liability against the primary violator, Milton. The Court accepted Pomerantz’s argument that Milton’s criminal conviction for securities fraud collaterally estopped him from challenging his liability for the civil securities fraud claim in this action. The Court recognized that to find that collateral estoppel applies based on a prior criminal conviction, a court must find that: (i) the prior conviction was for a serious offense; (ii) the issue at stake in the civil proceeding is identical to the issue raised in the prior criminal proceeding; (iii) there was a full and fair opportunity to litigate the issue at the prior trial; and (iv) the issue on which the prior conviction is offered was actually litigated and necessarily decided at trial.
Examining each issue in turn, the Court found that collateral estoppel applied for all elements of liability—falsity, materiality, scienter, reliance and loss causation—leaving open only the issue of the amount of damages for the jury at trial. Of note, the Court rejected Milton’s argument that the pardon issued by President Trump in March 2025 did not prevent collateral estoppel, agreeing that while pardons release a defendant from punishment, it does not erase the judgment of conviction or its underlying legal and factual findings. The Court also rejected Milton’s argument that the broader scope of the Plaintiffs’ claims in the current action prevented collateral estoppel.
This opinion is particularly significant in that it demonstrates the importance of class action securities litigation. Without Pomerantz’s pursuit of these claims, the victims of Milton’s blatant and massive fraud would have had no avenue for recovery, despite Milton’s criminal conviction, given his pardon issued by President Trump. This case stands as a bold reminder of the critical role that the securities plaintiffs’ bar plays as a private attorney general.