You laugh, but if we make this a matter of regulatory oversight, this sort of word parsing is exactly what every case will come down to.

Or you just look through the communications surrounding this video during discovery to see if there was a pattern establishing intent to mislead investors.

Bingo. Subpoena their emails and undoubtedly their whole defense falls apart.

The article suggested that it was more than just a video at issue. Milton said. "This thing fully functions and works, which is really incredible."

Further, internal emails not just public statements are often used to decide if something was intended to deceive or not.

There are 'reasonable person' laws all over. Maybe there should be one to apply here. Like 'unlimited* data' plans technically have fine print redefining the word unlimited, but a reasonable person will see the ad across the street and be misled.

Also even if it wasn't fine print, it's still comically illegal. Imagine someone saying "Our cereal cures cancer! Where cancer is defined as 'hunger'."

Fraud is about intent. They intended to defraud, that's the salient fact.

They also stated that investors at the time were aware of the limitations. If that is true, then who would have been defrauded?

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.)

NKLA I thought was around for a couple years. Maybe major shareholders were informed?

Were they public or private at the time?

(Because if they were public, that would be a problem...)

let's see - "Nikola Motor Company stock ticker is NKLA. It went public on the NASDAQ on June 4, 2020." (random google search)

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!

In other words "I'm not touching you..." but the adult version.

tbh thats probably legalistically enough for them to avoid getting sued

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

The law normally considers what a reasonable person would think, doesn't it? Who would think it was anything other than moving under its own power?

It depends on the circumstance. In the case of an investor, there's much more assumed due diligence than just "what a reasonable person would think".

If the guy shows you a video, are you gonna actually ask him whether it was what it looks like?

I guess you ought to kick the tyres on the real thing though.

Investors are supposed to conduct their own due diligence which could include talking to the engineers or setting up a demo under mutually agreed conditions at which point the difference between "in motion" and "driving" would be uncovered.

It's definitely not a good look though.

Context matters too. No reasonable person would expect a company to post a promotional video of their vehicle "in motion" just to show off that it has wheels that can roll.

The CEO directly said it was a working truck at the time. Today’s press release is skirting that fact.