The Nikola class action lawsuit is a federal securities fraud case in Arizona, Borteanu v. Nikola Corporation, brought on behalf of investors who bought Nikola stock between June 4, 2020, and February 25, 2021. A class has been certified, summary judgment motions are pending, and the parties have reportedly reached a settlement that still needs court approval. The opt-out deadline passed on February 23, 2026, so eligible shareholders who wanted to participate did not need to file anything to remain in the class.1Strategic Claims Services. Nikola Securities Litigation Notice of Pendency2Bloomberg Law. Nikola Investors Reach Settlement in Fraud Suit Post-Bankruptcy
Who Is Covered by the Class
The certified class covers all persons who purchased or acquired Nikola securities between June 4, 2020, and February 25, 2021, and were damaged by the alleged corrective disclosures during that window. Officers, directors, their families, and anyone who timely opted out are excluded.1Strategic Claims Services. Nikola Securities Litigation Notice of Pendency
Judge Steven P. Logan of the U.S. District Court for the District of Arizona certified the class on January 6, 2025.3Law360. Nikola Investors Win Class Cert in Securities Fraud Litigation If you bought NKLA shares inside that window and held through one or more of the price drops tied to the alleged disclosures, you are presumptively a class member. There is no claims form to file yet; any distribution process will follow either a settlement approval or a judgment.
What the Lawsuit Alleges
The consolidated complaint accuses Nikola and five individuals of violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making materially false statements about the company’s fuel cell technology, vehicle development, hydrogen production costs, and the reliability of its pre-order book.4FindLaw. Borteanu v. Nikola Corporation Additional Section 14(a) claims target former VectoIQ CEO Stephen Girsky over the proxy statement used to solicit shareholder votes on the reverse merger that took Nikola public.5Entwistle Law. Nikola Securities Class Action Complaint
The individual defendants are:
- Trevor Milton, founder and former executive chairman, alleged to have orchestrated the fraud.
- Mark A. Russell, then CEO and president, who signed the SEC filings at issue.
- Kim J. Brady, then chief financial officer, who also signed those filings.
- Stephen Girsky, former VectoIQ CEO and Nikola director, tied to the merger proxy.
- Steven Shindler, former VectoIQ CFO, tied to pre-merger filings.
The factual backdrop is the September 2020 report by short-seller Hindenburg Research, which accused Milton and Nikola of running “an intricate fraud,” including staging a promotional video of the Nikola One truck rolling downhill under gravity rather than driving under its own power, and overstating hydrogen production capabilities.6Hindenburg Research. Nikola: How to Parlay an Ocean of Lies Into a Partnership With the Largest Auto OEM in America The stock fell sharply over the following months, closing at $17.37 on December 1, 2020, after an insider lockup expired.7CNBC. Nikola Shares Down
In December 2023, the court partly denied the defendants’ motions to dismiss, finding the plaintiffs had adequately pleaded material misstatements, scienter, and loss causation, and letting a “scheme liability” theory proceed against the company and three individuals.8Climate Case Chart. Borteanu v. Nikola Corp
Where the Case Stands Now
Multiple summary judgment motions were filed in November 2025 by Milton, Russell, Brady, and Jeffrey Ubben, along with a partial summary judgment motion by the plaintiffs. The court said it would defer ruling until after the February 23, 2026, class exclusion deadline. As of mid-2026, no rulings on those motions have issued.9CourtListener. Borteanu v. Nikola Corporation – Docket
Bloomberg Law has reported that Nikola and the investors reached a settlement in the class action after the bankruptcy, with the parties expected to seek preliminary approval from the district court. Terms have not been publicly detailed.2Bloomberg Law. Nikola Investors Reach Settlement in Fraud Suit Post-Bankruptcy Until the court grants preliminary approval and issues a notice, no claims form or distribution schedule exists.
How Nikola’s Bankruptcy Affects Shareholders
Nikola Corporation filed for Chapter 11 bankruptcy on February 19, 2025, in the U.S. Bankruptcy Court for the District of Delaware, listing assets between $500 million and $1 billion and liabilities between $1 billion and $10 billion.10CNN. EV Nikola Chapter 11 Bankruptcy Nasdaq suspended NKLA on February 26, 2025, the stock was delisted in April 2025, and under the approved liquidation plan all common stock was cancelled with no recovery to shareholders.11Bitget. What Happened to Nikola Stock
That is important for two reasons. First, whatever you paid for your NKLA shares, the equity itself is gone; any recovery has to come from the class action or from other funds set up to compensate investors. Second, the bankruptcy triggered an automatic stay on claims against Nikola itself, but an Arizona federal judge ruled the stay did not extend to the former executives. The case against the individual defendants has continued on that basis.12Law360. Ex-Nikola CEOs Can’t Get Bankruptcy Pause for Investor Suit
Other Recoveries for Investors
Two other pots of money exist, and only one of them is meant for public investors directly.
The SEC settled its own fraud action against Nikola in December 2021 for a $125 million civil penalty, paid in five installments, without any admission or denial by the company.13U.S. Securities and Exchange Commission. SEC Press Release 2021-267 The SEC established a Fair Fund to distribute the money to harmed investors.14U.S. Securities and Exchange Commission. SEC Administrative Order, Nikola Corporation The Fair Fund holds approximately $48.8 million, including roughly $4 million received around December 2025 from a settlement with Nikola’s bankruptcy estate. A fund administrator was appointed in early 2023, but no distributions have been reported yet.15U.S. Securities and Exchange Commission. Matter of Nikola Corporation, Admin Proc File No. 3-20687 When distributions begin, the SEC or its administrator will publish eligibility rules and a claims process.
Separately, in November 2025, the Delaware Court of Chancery approved settlements totaling $33.7 million in derivative and direct litigation brought by shareholders. The $27.45 million derivative piece, after roughly $1.8 million in attorneys’ fees, went to Nikola’s bankruptcy estate rather than directly to public shareholders.16Entwistle Law. Chancery Plaintiffs’ Opening Brief in Support of Settlement A separate $6.3 million settlement resolved direct claims by former VectoIQ stockholders who alleged they were misled about dilution and business prospects before approving the merger.17Cohen Milstein. Nikola Corp Derivative Litigation If you bought NKLA shares in the class period on the open market and were not a VectoIQ stockholder before the merger, that $6.3 million pool is not aimed at you.
Trevor Milton’s Criminal Case and Presidential Pardon
A jury convicted Milton in October 2022 on securities fraud and wire fraud counts, and Judge Edgardo Ramos sentenced him in December 2023 to four years in prison, three years of supervised release, and a $1 million fine.18Morrison Foerster. Convict Nikola Trevor Milton19U.S. Department of Justice. Trevor Milton Sentenced to Four Years in Prison for Securities Fraud Scheme In March 2025, President Donald Trump issued Milton a “full and unconditional” pardon, voiding the conviction, sentence, fine, and blocking a $680 million restitution request prosecutors had recently made.20CNBC. Trump Pardons Nikola Trevor Milton CEO Securities Fraud Electric Vehicle
The pardon does not end the civil case. When Milton tried to use it in Nikola’s bankruptcy to shield a nearly $70 million claim he held against the company, Bankruptcy Judge Thomas Horan rejected that argument, ruling a presidential pardon does not establish factual innocence or extend to civil proceedings. Milton has appealed to a Delaware federal judge.21Bloomberg Law. Nikola Bankruptcy Appeal Tests the Reach of Trump’s Pardon Power For class members, the practical point is that the pardon leaves the securities case against Milton intact.
What Class Members Should Do Now
If you bought Nikola stock between June 4, 2020, and February 25, 2021, and you did not file an opt-out by February 23, 2026, you are in the class and do not need to take any action right now.1Strategic Claims Services. Nikola Securities Litigation Notice of Pendency Keep your brokerage records for the class period, including trade confirmations and month-end statements showing purchase dates, share counts, and prices. Those records will be needed to compute your recognized loss whenever a claims process opens, whether that comes through a settlement approval in Borteanu or a later Fair Fund distribution from the SEC.
Watch for two separate notices. One will come from the class action administrator once the district court grants preliminary approval of the reported settlement and sets a claims deadline. The other will come from the SEC or its Fair Fund administrator when distributions from the $125 million penalty begin. The two are independent, and eligibility rules may differ.