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A former Tesla Motors Australia director has been convicted for insider trading charges that saw him make more than $28,000 by purchasing shares from an ASX-listed lithium company 12 days before it announced a deal with the US-based electric carmaker in 2020.
Kurt Schlosser’s sentencing at Sydney District Court comes four months after he pleaded guilty to two counts of insider trading – the first charge pertaining to his acquisition of 86,478 shares in Piedmont Lithium (ASX: PLL) on 16 September 2020 after being informed of a pending agreement between the lithium provider and Tesla Inc.
According to the Australian Securities and Investments Commission (ASIC), after information about the lithium supply agreement with Tesla became public on 28 September 2020, Piedmont’s share price rose and Schlosser sold his holding for a net profit of $28,883.53.
Schlosser also pleaded guilty to telling a friend about Tesla’s in-principle agreement with Piedmont Lithium before it was public, despite knowing the friend was likely to buy shares in the company.
For the offences, Schlosser was sentenced to two years and six months imprisonment, to be released immediately upon entering into a recognizance on the condition that he be of good behaviour for the duration of his sentencing.
At the time he pleaded guilty, each offence carried a maximum penalty of 15 years imprisonment.
As a result of Schlosser’s conviction, he is automatically disqualified from managing corporations for five years. An order was also made by consent for the former Tesla Australia executive to forfeit the profit of $28,883.53 to the Commonwealth.
“ASIC is committed to acting against conduct that damages the integrity of Australia’s financial markets,” ASIC deputy chair Sarah Court said.
“Insider trading undermines investor confidence and gives individuals an unfair advantage. This criminal outcome demonstrates the serious consequences for trading when in possession of inside information.”
The matter was prosecuted by the Commonwealth Director of Public Persecutions following a referral from ASIC.
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