Tesla exec pleads guilty to insider trading

A former Tesla executive has pled guilty to charges of insider trading in Australia after he bought stock in a lithium mine before a cope with the automaker was announced.

Despite only recently starting the production of its own cells, the automaker has been involved in securing the availability of lithium, nickel, cobalt, and other minerals for its battery cell suppliers for some time.

More recently, Tesla began to not only cope with established mining firms, but it surely also began to sign contracts for off-take agreements with junior mining firms seeking to construct latest mining projects that might increase the availability of some critical resources for batteries.

This strategy helps those firms raise money to construct their mining projects.

In 2020, Tesla signed such an agreement with Piedmont Lithium, an organization developing a lithium project in North Carolina.

The automaker agreed to purchase about one-third of Piedmont’s planned 160,000 tonnes annual spodumene lithium production for at the least five years.

While the mine is situated in North Carolina, Piedmont Lithium is an Australian company, and Kurt Schlosser, Tesla’s head for Australia and Latest Zealand, was told concerning the deal ahead of time.

Australian Securities and Investments Commission (ASIC), the Australia equivalent of the SEC, announced today that Schlosser has pleaded guilty to 2 counts of insider trading:

On 16 September 2020, Mr Schlosser acquired 86,478 shares within the mining company Piedmont Lithium Limited after being informed, in his role as country director of Tesla Australia, of inside information regarding an in-principle agreement that Tesla Australia’s ultimate holding company, Tesla Inc, had reached with Piedmont for the availability of lithium.

After the agreement between Tesla and Piedmont was revealed, the share of the latter rose from $0.12 as much as a high of $0.60 at one point.

In line with ASIC, Schlosser pocketed $28,883.53 in cash in on selling his shares after the news broke. He also shared the knowledge with a friend – hence the second count of insider trading.

It shouldn’t be known when Schlosser left Tesla and if it was related to the case of insider trading.

The previous executive will likely be back in court on December 16 for sentencing.

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