The US Securities and Exchange Commission has proposed paying $48.8 million to investors who bought Nikola shares in 2020, less than 40% of the $125 million penalty the hydrogen truck maker agreed to pay, after its bankruptcy left most of the fine uncollected.
The plan, published in a notice inviting public comment, would distribute the Fair Fund created under the SEC’s December 2021 order, which found that “Nikola deceived investors about its products, technical advancements, and commercial prospects.”
It covers investors who bought or acquired Nikola or VectoIQ common stock between March 3, 2020 and September 18, 2020, the trading day before what the plan calls the last corrective disclosure.
VectoIQ was the blank-check company Nikola merged with to go public in 2020.
The proposal is not final, and comments are due within 30 days of the notice, by November 12.
Who Can Claim
Payments would be based on each investor’s “Recognized Loss,” calculated from per-share inflation tables and capped at actual market loss, according to the proposed plan.
If total recognized losses exceed the fund, investors would be paid pro rata.
The plan assigns inflation of $15.62 per share to purchases from March 3 to September 9, 2020, $11.13 to September 10 and $5.57 to September 11 through 18, falling to zero afterward.
Shares still held at the end of the plan’s lookback period, on December 18, 2020, are valued at $21.50, the average closing price over that period.
Warrants, options and other derivatives are excluded, although shares obtained by exercising warrants qualify.
No payment below $25 will be made, and claims will be due 180 days after the plan notice is first mailed.
From $125M to $48.8M
The SEC notice does not explain the gap between the penalty and the fund, but Nikola’s filings do.
Nikola paid the penalty in installments, including $6.0 million in 2023 and $3.8 million in 2024, and still owed $80.2 million at the end of 2024, according to its last annual report, filed in October 2025.
That implies $44.8 million had been paid before the bankruptcy.
The SEC filed a proof of claim for about $83.1 million, and Nikola sought to subordinate all of it under section 510(b) of the Bankruptcy Code, which pushes claims arising from securities purchases behind other creditors.
The two sides settled before the plan was confirmed.
The SEC agreed that $40.0 million would be treated as a junior claim in Class 7, and about $43.1 million was allowed as a general unsecured claim, on the condition that its only payment would be $4.0 million in cash on the plan’s effective date.
The $44.8 million paid earlier plus the $4.0 million payment equals the $48.8 million the SEC now says it has collected.
Class 7 claims “receive no distribution as senior classes will not be paid in full under the Plan,” a federal judge wrote in a September 9 opinion.
The remaining $76.2 million of the penalty is therefore not expected to reach investors.
The Chapter 11 Case
Nikola filed for Chapter 11 protection in Delaware on February 19, 2025, before Judge Thomas M. Horan, and sold substantially all of its assets through the case.
Lucid bought assets including the Coolidge, Arizona, plant and headquarters for $10.0 million plus a further $7.0 million earmarked for retrofitting battery-electric trucks, along with assumed liabilities, according to Nikola’s annual report.
HyRoad Energy bought 113 fuel cell trucks, spare parts, software and intellectual property at an auction in August 2025, for an undisclosed price.
In December 2025, a company called ISSO, LLC objected to an amendment of the HyRoad sale and asked the court to set the sale order aside, filing a supporting declaration from Milton, according to the bankruptcy docket.
The bankruptcy court confirmed Nikola’s plan of liquidation on September 12, 2025, and the plan took effect on December 12, 2025, according to a FINRA advisory and the estate’s monthly operating report.
All Nikola shares were canceled, and holders “will not receive any distribution” on them, the company said in its annual report.
The remaining assets went to a liquidating trust for unsecured creditors, overseen by Liquidating Trustee Thomas A. Pitta.
The trust sued investment firm 3i LP in April to recover $39.4 million Nikola paid it to retire an $80 million unsecured note less than 90 days before the bankruptcy filing, Bloomberg Law reported, adding that other unsecured creditors may recover as little as 20% of their claims.
The Pardon in Court
Founder Trevor Milton received a “full and unconditional” pardon from President Donald Trump on March 27, 2025, five weeks after the bankruptcy filing.
A jury had convicted him in October 2022 of one count of securities fraud and two counts of wire fraud, and he was sentenced to four years in prison.
He was never incarcerated, having been free on bail pending appeal.
After the pardon he withdrew his appeal, and the trial court lifted his bail and refunded his special assessment but did not vacate his conviction, according to a September 10 opinion by US District Judge Gregory B. Williams.
Prosecutors had asked the trial judge two weeks before the pardon to order about $660.8 million in restitution to Nikola shareholders, but no restitution was ever ordered.
The SEC dropped its civil case against Milton with prejudice in September 2025.
In the bankruptcy, Milton filed a claim for $69,758,064.15 in legal fees he said Nikola owed him under separation and indemnification agreements, and argued that the pardon barred any finding of misconduct.
The plan subordinated that claim for inequitable conduct, leaving him with no recovery, and Williams upheld that treatment on appeal.
“Pardons do not change the fact that a defendant engaged in the underlying misconduct or civil courts’ ability to so find,” Williams wrote.
He noted that Milton’s own counsel had conceded at oral argument that a “pardon doesn’t get you out of civil liability.”
The ruling rested on a November 2023 arbitration award that found Milton breached his fiduciary duties to Nikola through false and misleading public statements and ordered him to cover 97% of the resulting damages, including the SEC penalty.
With interest, the liquidating trust says Milton owes about $96.8 million under the award, which the Ninth Circuit upheld on February 5, 2026.
Milton filed a notice of appeal to the Third Circuit on October 7.
Investor Suit Heads Toward Trial
Shareholders suing in Arizona won a key ruling against Milton on September 8.
US District Judge Steven P. Logan held that Milton’s criminal conviction bars him from relitigating liability under section 10(b) of the Securities Exchange Act, granting the class partial summary judgment, according to the order.
The court found that pardons do “not erase a judgment of conviction, or its underlying legal and factual findings.”
Logan also denied most of the summary judgment motion filed by former Chief Executive Officer Mark Russell and former Chief Financial Officer Kim Brady, while dismissing claims against former director Jeffrey Ubben as time-barred.
The class covers investors who bought between June 4, 2020 and February 25, 2021, and the parties told the court on September 15 they were ready for a final pretrial conference.
Claims against Nikola itself remain stayed by the bankruptcy.
The class had agreed a $13 million settlement with Nikola in a January 28, 2025 term sheet, weeks before the filing, but the plan placed that claim in Class 7, and Williams affirmed the subordination on September 9.
The lead plaintiffs appealed to the Third Circuit on September 22.
Milton’s Next Venture
Milton has since become Chief Executive Officer of SyberJet, which is developing the nine-seat SJ36 business jet.
The company said in August that its older SJ30-2 had beaten a light-jet speed record, a claim still awaiting certification.
SyberJet plans to unveil a full-scale SJ36 mockup on Monday, October 19, at Henderson Executive Airport in Nevada.
“This isn’t an incremental improvement — it’s a fundamental course change,” Milton said when the event was announced in June.
