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Civil Plaintiff

EV Maker Nikola Agrees to a $125 Million Fraud Settlement

Electric truck maker Nikola has agreed to pay the Securities and Exchange Commission $125 million to settle charges that it defrauded investors by misleading them about its products, technical capacity and business prospects.

SEC officials said they hoped the penalty would serve as a warning to all companies hoping to enter public markets via a merger deal with a special-purpose acquisition company, or SPAC. Specifically, officials said statements from companies hoping tap public capital markets need to be wholly accurate.

The action, announced Tuesday morning, marked the SEC’s most recent move to more thoroughly regulate SPACs, which are also known as “blank check companies.” The regulator issued new accounting guidance in the spring, effectively halting a surge in SPACs at the time. They started surging again as the year went on. Former President Donald Trump, for instance, is pursuing a SPAC merger that he says would result in the creation of a social media and streaming company. The SEC is investigating the Trump SPAC deal.

Read the source article at cnbc.com

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