A former Tesla executive plead guilty to insider trading charges in Australia after purchasing stock in a lithium mine before a deal with the company was revealed.
Kurt Schlosser, Tesla’s ex-head for Australia and New Zealand, learned ahead of time about the carmaker’s off-take agreement with Australian mining firm Piedmont Lithium, which was currently developing a lithium project in North Carolina. The deal was for Tesla to purchase around one-third of Piedmont’s planned 160,000 tonnes annual spodumene lithium production for five years.
Schlosser then placed positions in the Australian firm, which saw its share price surge from $0.12 up to a high of $0.60 at one point following the announcement of the deal.
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“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,” read the official charges filed by Australian Securities and Investments Commission.
Schlosser profited $28,883.53 from selling his shares after the news emerged, according to the agency. He also disclosed the information to a friend, resulting in the second count of insider trading.
It is unknown when Schlosser departed Tesla or if his departure was related to the insider trading investigation. The former executive will be sentenced in court on December 16.
The story comes on the heels of Berkshire Hathaway Vice Chairman Charlie Munger’s flattering words for Tesla and its CEO Elon Musk, saying he was “certainly surprised that Tesla did as well as it did.”
“We haven’t had a successful new auto company in a long, long time. What Tesla has done in the car business is a minor miracle,” Munger said. However, he clarified that he does not equate the carmaker with bitcoin, differentiating that “Tesla has made some real contributions to this civilization.”
The Piedmont deal is one of the few strides by the electric carmaker to solidify its supply chain for its batteries. Last month, it was reported that Tesla allegedly held talks with Swiss mining firm Glencore about a potential 10%-20% equity stake.
Most EV companies have thus far refrained from taking on direct stakes in the mineral mining business, but as Western governments increasingly look to ban combustion engines, big carmakers will likely seek ties with the mining industry to secure supplies for their electric vehicles.
Information for this briefing was found via Electrek and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
