The truckmaker, which was founded by American entrepreneur Trevor Milton, went public via a SPAC, or a special purpose acquisition company, reverse merger in June 2020. Shares in the company took off that summer, riding investor enthusiasm for all things EV. Investors pushed the value at one point to above $34 billion—a market cap greater than that of Ford and Stellantis—even though it had never made an automobile for sale.

A few months later, the activist short-seller Hindenburg Research dropped a bombshell on the markets, revealing the company’s prototype hydrogen-powered Nikola One fuel-cell semi had been rigged for a presentation, making it look like it was driving when it was really just rolling quickly downhill with the help of gravity. Following the revelation, Nikola shares bombed lower, and never recovered.

Nate Anderson, founder of the short-seller firm, said on Twitter on Tuesday, the settlement was swift and just.

“People like to gripe about these settlements, but this resolution was expedient (~1 year), meaningful (~17.5% of SPAC proceeds) and critically, it secures cooperation against Trevor Milton going forward,” he wrote.

The story of Anderson’s investigation and eventual takedown of Nikola was featured in Fortune in December 2020.

‘Falsely portrayed the true state of the company’s business’

In a statement on Tuesday, the SEC said Nikola inflicted harm on retail investors by misrepresenting and omitting material facts, including with regard to its partnership with General Motors. 

“Nikola Corporation is responsible both for…allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” said Gurbir Grewal, director of the SEC’s division of enforcement, in the statement.

Shares in Nikola traded up a tick on Tuesday, at $9.30, valuing the company at roughly $3.8 billion or a small fraction of other EV startups like Lucid and Rivian.

Milton, who is no longer the Nikola CEO, faces separate fraud charges brought by the SEC for pumping up the company’s business prospects via social media to existing and potential investors. That, too, is considered a watershed case that could test the limits of what CEOs can and cannot say on social media channels to put their publicly traded company in the best possible light.

Nikola, which neither admitted to nor denied the allegations, now has two years to pay the penalty stretched across five separate installments through 2023. 

The company also agreed to establish a Fair Fund to return proceeds to victimized investors with the money from the settlement.

While the cash will drain its reserves, Nikola said its income statement will not be affected as it had already booked a provision in its third-quarter results. 

Hindenburg Research uncovered the fraud in September of last year, accusing Milton of duping an auto industry and exuberant retail investors who were desperate not to miss out on the next-generation technology in order to forge a $20 billion company built on a “cloud of smoke.” Investor watchdogs have since held up Nikola as an example of the danger loosely regulated SPAC IPOs hold for retail investors.

The SEC settlement comes just days after the first two units of the battery-powered Nikola Tre were delivered to a California-based truck company operating in the ports of Los Angeles and Long Beach.