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A former Nikola Corp. contractor whose allegations of fraud at the electric truck company helped spur a criminal investigation told a federal jury he made $600,000 off a short seller’s report on Nikola.
Paul Lackey, an engineer at the electric-drive systems company EVDrive that did contract work for Nikola, was testifying under questioning by the defense in the criminal trial of Nikola founder Trevor Milton. He said he gave short seller Hindenburg Research information in exchange for a share of its profits from shorting the company’s shares.
The U.S. alleges that Milton, 40, lied to investors again and again to make Nikola look better than it was and pump up the stock. The defense has called the case “a prosecution by distortion.”
Lackey, a key government witness, took the stand on Sept. 14 for a second day of testimony under a fiery cross-examination by defense attorney Kenneth Caruso. Milton watched intently from the defense table in the lower Manhattan courtroom, hands clasped.
Caruso asked Lackey about a statement he made that he wasn’t using his knowledge to make money.
“But that’s exactly what you did, didn’t you?” Caruso asked.
“I was not trying to use it to make money,” Lackey said.
Caruso pressed on, asking if Lackey hadn’t used it to make $600,000.
“I did ultimately receive that money,” Lackey acknowledged.
Caruso observed that $600,000 could be “a life-changing amount of money.”
“Not sure it is a...
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