Phoenix Tech CEO Resigns Amid Fraud Claims

PHOENIX — The founder of a Phoenix-based electric trucking company announced his resignation Sunday amid claims that he lied about the company's technology.

Trevor Milton, who founded Nikola, named for inventor Nikola Tesla, stepped down from his post as chairman and CEO at the request of the company's board of supervisors, according to a statement posted to Twitter. Milton is currently being investigated by the U.S. Justice Department for misleading investors.

“I know many of you have put a lot of your energy into supporting Nikola, and I hope you follow me in continuing to do so,” Milton said in a statement, according to the Phoenix Business Journal. “I will be cheering from the sidelines with you now. The company is incredible, the mission too important and the future ready and willing for your support.”

His Twitter page has since been made private.

Claims of fraud began to swirl around Milton after Hindenburg Research published a report Sept. 11 alleging that Milton made false claims about the company’s capabilities and performance. Nikola trucks are powered by hydrogen technology, which Hindenburg claims is not functional. The research firm also accused the 2016 launch of the company's Nikola One vehicle of being a "total farce." Nikola has denied the allegations.

The company's shares have fallen sharply amid the public turmoil, landing at $28.72 Monday. Milton currently holds 24 percent of the company's outstanding shares.

Nikola announced that board member Stephen Girsky, previously a vice chairman of General Motors, will replace Milton as chairman effective immediately. Mark Russell will be CEO. GM signed a $2 million partnership with Nikola two weeks prior to the leadership changes.

“On behalf of the board, I want to thank Trevor for his visionary leadership and significant contributions to Nikola since its founding," Girsky said in a statement. "Trevor saw the possibility of creating an end-to-end zero-emission transportation system when the industry was still in its nascent stages and took action to build the Nikola of today, with world-class partnerships, groundbreaking R&D, and a revolutionary business model. I know I speak for everyone at Nikola in our gratitude and in wishing him all the best.”