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Tesla exec pleads guilty to insider trading

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

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

More recently, Tesla started to not only deal with established mining companies, but it also started to sign contracts for off-take agreements with junior mining companies looking to build new mining projects that would increase the supply of some critical resources for batteries.

This strategy helps those companies raise money to build their mining projects.

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

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

While the mine is located in North Carolina, Piedmont Lithium is an Australian company, and Kurt Schlosser, Tesla’s head for Australia and New Zealand, was told about 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 two counts of insider trading:

“On 16 September 2020, Mr Schlosser acquired 86,478 shares in 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 supply of lithium.”

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

According to ASIC, Schlosser pocketed $28,883.53 in profit from selling his shares after the news broke. He also shared the information with a friend – hence the second count of insider trading.

It is not known when Schlosser left Tesla and if it was related to the case of insider trading.

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

This article was originally published by Electrek.co. Read the original article here.
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