> "Nikola never stated its truck was driving under its own propulsion in the video," Nikola wrote. "Nikola described this third-party video on the Company’s social media as 'In Motion.' It was never described as 'under its own propulsion' or 'powertrain driven.'
Further, internal emails not just public statements are often used to decide if something was intended to deceive or not.
I’m not trying to defend them, but at that stage of the (private) company, if they were honest with investors then is there an issue? Where is that line? If they weren’t honest with them, then that’s a whole other story.
(And I’m not sure you can assume they were in fact honest with investors.)
(Because if they were public, that would be a problem...)
but the article indicates "When Nikola Motor Company founder Trevor Milton unveiled a prototype of the Nikola One truck in December 2016, he portrayed it as fully functional."
So there you go!
But the very idea that "yeah, you're right on all the facts, its just that we didn't really 'lie'" isn't a great defense of the business
I guess you ought to kick the tyres on the real thing though.
It's definitely not a good look though.
To me, the whole NKLA situation feels like a giant Kickstarter scam.
> contributing to global warming is securities fraud, and sexual harassment by executives is securities fraud, and customer data breaches are securities fraud, and mistreating killer whales is securities fraud, and whatever else you’ve got. Securities fraud is a universal regulatory regime; anything bad that is done by or happens to a public company is also securities fraud, and it is often easier to punish the bad thing as securities fraud than it is to regulate it directly.
https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
The problem is, who was defrauded? The investors, I guess, but if they sue then they can only collect money from the company that they own anyway. It's not obvious that's a money-gaining proposition.
Presumably it would not be feasible to collect large sums from the officers, but they frequently do have D&O insurance policies that could kick in (https://en.wikipedia.org/wiki/Directors_and_officers_liabili...)
This is why people have been so critical of Elon Musk. Elon Musk's flippant behavior engenders worse and worse.
Well, we do have laws about
* False Advertisement * Investors' Fraud
Unfortunately they are not applied, or not applied consistently; and this is just one of the many examples that I come across on a weekly basis.
What makes matters worse is that when talking about it with people at work or so, they don't seem to care enough and feel it's not a problem.
It is a problem, it's a slippery slope into lawless chaos.
If such laws exist, they aren't worth the paper they're printed on.
And as long as that's the case, people crazy and risky enough to become startup founders will never be persuated not to do it.
"We’re building an AI-powered writing assistant that helps people communicate and connect"
https://www.grammarly.com/jobs
Compared to AI "Full Self-Driving Capability" isn't any more implausible. Yet we don't call those AI companies fraud.
This is how Tesla marketing Model 3's Autopilot. Marketing speak for sure, but lie?
"Autopilot enables your car to steer, accelerate and brake automatically within its lane. Full Self-Driving Capability introduces additional features and improves existing functionality to make your car more capable over time"
Nowhere does Tesla claim that their cars currently have the ability to do "Full Self-Driving".
They sell a package which promises, in the future, to enable "Full Self-Driving" on the associated car.
1. I don't know. I guess that's the risk people take when they buy the FSD package without a guaranteed date.
2. It's not clear to me that your average life numbers apply to Teslas.
In Germany, we have the "Gesetz gegen den unlauteren Wettbewerb", roughly translated as "law against unfair competition". It's a pretty old piece of law (1896), but unlike other laws in Germany this one is held reasonably up to date.
Stuff like we see here would be flat out prosecutable by any competitor.
In the case of something like Theranos, I thoroughly agree. Oversight of a commercially available product, especially one with health implications, is definitely necessary. Although it seems even these systems failed in the Theranos case.
If they say they're going to sell trucks, and they present a truck doing truck things (moving), most people would assume it's a complete truck as portrayed. An empty shell is just fraud in the court, hopefully.
It's not a good look, but you also shouldn't be investing based on what amounts to a commercial. This should be another stain for the company and another warning sign for investors, but we don't need a law against misleading promo videos because almost all are short on information and high on emotion. It's the investor's job to get the information behind the video.
As an example, if you apply for a bank loan and falsify the application, you can still be charged with fraud and go to jail even though the bank potentially could have discovered the falsehood by hiring an investigator before issuing the loan.
Perhaps there should be some requirement to pay for independent professional witnesses, sort of like observers who validate Guinness world records as having met some (negotiable) standard of existing in the real world while being bound not to comment on the specifics of how it was achieved.