Trevor Milton, the founder of Nikola Corp. and onetime executive chairman of the electric-truck startup, was indicted Thursday on securities-fraud charges for allegedly lying to investors about its business making commercial trucks powered by alternative fuel.

Mr. Milton, who resigned from the company last September, faces two counts of securities fraud and one count of wire fraud, according to an indictment made public Thursday. The 39-year-old faces a maximum 25-year prison term if convicted of the top securities-fraud charge.

“In order to drive investor demand for Nikola stock, Milton lied about nearly every aspect of his business,” Manhattan U.S. Attorney Audrey Strauss said at a news conference Thursday.

The Securities and Exchange Commission also filed a civil complaint Thursday against Mr. Milton.

Mr. Milton pleaded not guilty to the charges in federal court in Manhattan on Thursday and was released on $100 million bond. A spokesman for his lawyers—Brad Bondi, Marc Mukasey and Terence Healy—said Mr. Milton was innocent. “Mr. Milton has been wrongfully accused following a faulty and incomplete investigation in which the government ignored critical evidence and failed to interview important witnesses,” the spokesman said.