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Nikola (NKLA) to Pay $125M SEC Penalty Fee Over Ex-CEO's Remarks

Nikola (NKLA) is required to pay a $125 million penalty charge as directed by the SEC over the misleading comments by its former CEO last year.

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This story originally appeared on Zacks

Nikola Corporation NKLA has been levied with a $125 million penalty charge to be paid to the United States Securities and Exchange Commission (“SEC”) over the purported misleading statements about the company’s capabilities made by its founder and former CEO, Trevor Milton, last year.

The SEC, in its settlement, stated that Nikola is held responsible for both Milton’s remarks and other alleged deceptions, all of which falsify the actual state of the company’s business and technology. The charge levied by it has to be made in five installments over the next two years, with the first installment scheduled at the end of 2021. The remaining installments will be paid semiannually through 2023. The company had anticipated the settlement charge as it had taken a $125 million reserve in its third-quarter earnings, as was announced by it in November this year.

The company welcomed the decision as it indicated the closure of government investigations. However, the company has neither admitted to nor denied the allegations.

Milton is presently undergoing criminal and civil charges for his statements. He seeks to dismiss an indictment that has accused him of misleading investors, opining that he had made merely promotional comments supporting the company.

Nikola currently carries a Zacks Rank #3 (Hold). NKLA is contending for a niche in the electric vehicle market. It plans to produce both battery-electric and fuel-cell semi-trucks and aims to establish a hydrogen fueling network.

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Better-ranked peers in the same space include Goodyear GT, flaunting a Zacks Rank #1 (Strong Buy) and Fox Factory Holdings FOXF and Dorman Products DORM, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Goodyear has an expected earnings growth rate of 197% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised 77% upward over the past 60 days.

Goodyear beat the Zacks Consensus Estimate for earnings in all the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 228.5%, on average. Its shares have also gained around 95.5% over a year.

Fox Factory has an expected earnings growth rate of 48.2% for the current year. The Zacks Consensus Estimate for the current year has been revised around 2% upward over the past 60 days.

Fox Factory beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters. The company delivered a trailing four-quarter earnings surprise of roughly 16%, on average. Its shares have rallied around 38.3% over a year.

Dorman has an expected earnings growth rate of 36% for the current year. The Zacks Consensus Estimate for the current year has been revised 2% upward over the past 60 days.

Dorman beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 10.41%, on average. Its shares have also rallied around 12.6% over a year.



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