Ex-Tesla director who pleaded guilty to insider trading will be released on the condition of 'good behavior'
Tesla Australia's former head was sentenced to over two years in prison, but will be released.
Kurt Schlosser pleaded guilty to profiting over $28,883 off knowledge of Tesla's deal with a mining company.
He'll be released on the condition of "good behavior," but can't manage a company for five years.
The former director of Tesla's Australian operations, Kurt Schlosser, was sentenced to two and half years in prison on Friday, Australia's corporate watchdog said in a press release on Tuesday.
The ex-Tesla executive had pleaded guilty to two insider trading offences in November in Sydney District Court, but the Australian Securities & Investments Commission said Schlosser would be released from prison immediately on the condition that he be on "good behavior" for the duration of the sentence. Schlosser is also barred from managing a company for five years as part of his conviction, ASIC said.
While he was an executive at Tesla Australia, Schlosser learned that Tesla planned to enter into an agreement with Piedmont Lithium and bought up 86,478 shares of Piedmont Lithium in two transactions, ASIC said. He later sold the shares after Tesla announced the deal and earned about $28,883 off the stocks, the watchdog said. The executive also advised a friend to buy shares of the mining company ahead of the announcement, according to the press release.
Schlosser also forfeited the profit he made from the transactions.
Spokespeople for Tesla and Piedmont Lithium did not respond to a request for comment ahead of publication. Piedmont declined to comment in response to a request from Reuters.
"Insider trading undermines investor confidence and gives individuals an unfair advantage," ASIC Deputy Chair Sarah Court said in the press release. "This criminal outcome demonstrates the serious consequences for trading when in possession of inside information."
Tesla first announced a five-year agreement with Piedmont Lithium in 2020 on the heels of the electric-car maker's "Battery Day." The mining company agreed to supply Tesla with spodumene concentrate, a high purity lithium ore mineral that can be converted into one of the building blocks for EV batteries. At the time of the announcement, shares of the mining company surged as much as 83% to their highest level since 2007.
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