| In Trevor
Milton Trial Nikola CFO Brady Says Avoid
Retail Investors, Land Deal Call Recorded
By Matthew
Russell Lee, Patreon Maxwell
book
BBC -
Honduras
- CIA
Trial book - NY
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SDNY COURTHOUSE,
Sept 28 –
The trial of Nikola founder
Trevor Milton for wire and
securities fraud moved, on
September 28, through the
cross examination of CFO Kim
Brady to Utah land seller
Peter Hicks. Inner City Press
was there, and live tweeted. Thread:
Cross examination:
Milton's
lawyer Marc Mukasey: Let me show you
the VectoIQ - Nikola document. Are these the
board of directors?
Brady: Yes.
Mukasey: This was intended to educate about
the SPAC process, a relatively new thing,
right? Brady: Yes.
Mukasey: And here an example is given, of
Virgin Galactic, a space travel company
(chuckles), some form of space travel, right?
Brady: It's tourist flights. Mukasey: It's
owned by a guy named Richard Branson, right?
Brady: He was the majority shareholder, not
involved in the day to day management.
Mukasey: And this is "Cowen's thoughts on
proper strategy" for SPACs, right? Brady: Yes.
Mukasey: And in this document, Nikola wrote
that "Behind the Meter" option is available at
certain locations, right? Brady: That's what
it says.
Mukasey: Let's turn to publicity. You and your
colleagues discussed using Virgin Galactic as
a model, for publicity of a SPAC, right?
Brady: I don't remember that. Mukasey: Let me
show you this email from Jeff Ubben [from
valueact dot com], saying that Trevor should
follow the example of Richard Branson. Do you
see it?
Brady: I do. Mukasey: And here is a list of
Branson's promotion activities from July to
October 2019, right? It weaves them through
with SEC filings... Brady: Is that a question?
Mukasey: Am I reading it correctly? Brady:
Yes. [sidebar] Mukasey: And here in an email
with Vince Caramella, Mr. Milton wrote, We
need a good SEC attorney to help with tweets,
right? Brady: That's what is says. Mukasey:
Then Nikola reached out to Rystad Energy,
right? Brady: Who?
Mukasey: Let me refresh your recollection.
There was a time Mr. Milton asked for a
researcher, to fact check, right? Let me show
only you, not the jury, this spreadsheet...
Brady: I see Rystad. But the rest, I don't
remember.
Mukasey: Later, but before Nikola went public,
Jeff Ubben bought stock from Trevor Milton,
right? Brady: Yes. Mukasey: And it was
arms-length, in a stock purchase agreement
that you signed, correct? Brady: Yes. Mukasey:
So effectively, Jeff Ubben paid $10 a share
for the Nikola shares, right?
Brady: Correct. Mukasey: There's been a lot of
talk in the courtroom about the Badger. You
understood it would not be built without an
OEM partner, right? Brady: Yes. Mukasey
(proffering a document) Your Honor, I'm going
to move to admit this under FRE 803(6). AUSA:
Hearsay! Judge Ramos: Let's have a sidebar.
[Whispering, with white noise turned up]
Mukasey
shows a Nikola purchase order, to Robert
Bosch LLC, approved by Kim Brady CFO.
Brady: My name went on everything.
Mukasey: But I am assuming you would not
allow your name on something you were not
approving, right?
Brady: I don't know what you are suggesting.
Mukasey: Let's talk about SEC
filings... Here on Nikola's website as it
existed in 2020 you are listed as a
contract, for "Sell-Side and Buy-Side
Analysts," right?
Brady: Yes.
Mukasey: But you didn't want retail
investors reaching out to you, correct?
Brady: Correct. I did not.
Mukasey: But this guy (pointing at Milton)
he wanted to engage with the average Joe,
right?
Brady: It's highly unusual for anyone to be
in contact with retail investors.
Mukasey: But unusual can be OK --
AUSA: Objection!
Mukasey: You've made clear how you and
Mr. Milton differed, in who you wanted to
speak to --
AUSA: Objection!
Brady: Retail investors tend to believe--
Mukasey: Move to strike.... There is
nothing wrong with communicating with retail
investors, right?
Brady: As I said, you have to be careful...
Mukasey: It's not legal, correct?
Brady: It's not illegal, but it's highly
usual.
Mukasey: Nothing improper, yes or no? A: Yes
Mukasey: Let's be clear - high frequency
traders are mostly not individuals, yes?
Brady: They trade frequently. Mukasey: As to
retail investors, you don't know what they
read, because you don't talk to them, right?
Judge Ramos: That question is compound. Try
again
Mukasey: You think retail investors are too
lazy or stupid to read SEC filings? You make
filings to educate them -
Brady: It's required by law.
Mukasey: You don't know what the average
retail investors reads. Brady: I know, based
on the ones I've spoken with
Mukasey: Here, you called the Hindenburg
report a hit job and character assassination
against Trevor Milton, correct?
Brady: If you say so. Mukasey: It's right
here.... Nikola got a grand jury subpoena on
Sept 19, correct? Brady: If you say that's
the date
Mukasey: And Nikola provided many
documents and cooperated and your testimony
here today is part of that... Nothing
further.
Judge Ramos: Re-direct. AUSA: May we
approach? [Another whispered sidebar]
AUSA: Mr. Brady, you were asked for the
basis of your conclusion about retail
investors, and said it was based on your
experience, right?
Brady: Yes. AUSA: Did you convey your
concerns to Mr. Milton in 2020? Brady: Many
times.
AUSA: Were Mr. Milton's representations that
Nikola's reservations were binding contracts
true or false? Brady: False.
Re-cross: Mukasey: In the summer of 2020,
Mr. Brady, you knew that Trevor Milton was
tweeting, right?
Brady: Yes. Mukasey: You knew that before
the Hindenburg / short report, right? Brady:
I knew some. But more from the report.
Mukasey: You got paid more, if more
institutional investors invested in Nikola,
right? Brady: In the private round.
Mukasey: But you didn't get the $250,000
bonus for every $10 million put in - but not
from retail investors, right? Nothing
further.
They've back from the break. On the stand,
Utah land-seller Peter Hicks. AUSA: When did
you sell land to Trevor Milton?
A: It went into contract in June 2020, and
closed in August, including for Nikola stock
options. AUSA: How big was the land? A: 1/3
the size of Manhattan.
AUSA: What price was suggested to you?
Peter Hicks: Mr. Anderson said Mr. Milton
was thinking of $5 million. I was not
interested in taking a loss. I wanted cash,
not stock options.
AUSA: Was there a recorded call? Peter
Hicks: Yes. My son recorded it. AUSA: How
old was he? Hicks: 23. He was home for COVID
and I had him on the call with Trevor
Milton, in April 2020. AUSA: Did you know he
was recording? Hicks: No.
AUSA:
Did you know that it can be a crime in
some circumstances to record without
consent in Massachusetts, where you were?
Hicks: Yes. AUSA: And did your son get a
commitment he will not be prosecuted, for
turning this recording over? Hicks: Yes,
he did.
Tape is played: Trevor Milton talking
about hydrogen stations, on LA to Phoenix
route.
AUSA: Did you tell you they were already
gobbling up the land for this?
Hicks: Yes.
It continues...
The
case is US v.
Milton,
21-cr-478
(Ramos)
***
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