Trevor Milton, founder of Nikolai Motors, pleaded not guilty to fraud charges in a Manhattan court on Thursday afternoon local time. Earlier, federal prosecutors accused Milton of misleading investors about the capabilities and technology of the electric car start-up.

Milton was released on $100m bail on two properties worth $40 million in Utah. He was banned from contacting investors and was ordered by the court to restrict travel. It was his first major appearance since he resigned from the company and deleted his social media account.

A federal grand jury charged Milton with three counts of criminal fraud and lied in "almost all aspects of business" to boost Nikolai's stock sales, according to an indictment released on Thursday.

Milton's lawyers tried to defend his innocence, and his team said Milton was "wrongly charged after a wrong and incompetent investigation" and that justice would be done only if he was exonerated.

Milton was charged with two counts of securities fraud and one count of telecommunications fraud. The maximum penalty for the two securities fraud crimes is 20 years' imprisonment and 25 years' imprisonment respectively. The maximum penalty for telecom fraud is 20 years in prison.

The grand jury said Milton should be confiscated of all property that "can be traced back to the above-mentioned crimes", which may include the more than $1bn he earned when Nikolai went public last June.

Nikolai's shares tumbled 15.2% on Thursday to close at $12.03, down sharply from the all-time high of $93.99 reached on June 9, 2020, just days after the company went public.

The Securities and Exchange Commission (SEC) also filed civil securities fraud charges against Milton on Thursday. SEC asked the Southern District Court of New York to permanently ban him from serving as an executive of any company that issued securities, handing over all ill-gotten gains and paying fines.