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23-071MR Former Tesla Motors Australia director sentenced for insider trading
On 17 March 2023, former Tesla Motors Australia Pty Ltd (Tesla Australia) director Kurt Schlosser, of Sydney, New South Wales, was sentenced in the Sydney District Court following his guilty pleas to two insider trading offences.
Mr 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 two years and six months.
In his role as country director of Tesla Australia, Mr Schlosser was informed of a confidential, in-principle agreement to be entered into by Tesla Inc in the United States of America. The agreement related to the supply of lithium to Tesla Inc by Piedmont Lithium Ltd, a company listed on the Australian Securities Exchange (ASX).
Mr Schlosser then purchased 86,478 shares in Piedmont Lithium Ltd in two transactions and also communicated that inside information to a friend in circumstances where it was likely that person would also acquire Piedmont Lithium Ltd shares. Mr Schlosser, shortly after the announcement was made public, sold the shares for a realised profit of $28,883.53.
An order was also made by consent for Mr Schlosser to forfeit the profit of $28,883.53 to the Commonwealth.
ASIC Deputy Chair Sarah Court said, ‘ASIC is committed to acting against conduct that damages the integrity of Australia’s financial markets. 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.’
As a result of his conviction, Mr Schlosser is also automatically disqualified from managing corporations for five years.
The matter was prosecuted by the Commonwealth Director of Public Prosecutions after a referral from ASIC.
On 15 November 2022, Mr Schlosser pleaded guilty to two insider trading offences relating to shares in Piedmont Lithium Ltd, contrary to s1043A of the Corporations Act, (22-319MR).
A breach of s1043A of the Corporations Act carries a maximum penalty of 15 years’ imprisonment.