A former boss of Tesla Inc (NASDAQ: TSLA)'s Australian operations has been sentenced to 2.5 years of imprisonment for insider trading.
The Sydney district court handed down the sentence to Kurt Schlosser, who used to be Tesla Australia's country director.
While holding that position, he was told of a confidential, in-principle agreement that Tesla's US head office had struck with Piedmont Lithium Inc (ASX: PLL) to supply lithium to the car maker.
The court heard from the Australian Securities and Investments Commission that Schlosser bought 86,478 shares in Piedmont Lithium in two transactions before that deal was announced to the public.
"[He] also communicated that inside information to a friend in circumstances where it was likely that person would also acquire Piedmont Lithium Ltd shares," ASIC stated.
"Mr Schlosser, shortly after the announcement was made public, sold the shares for a realised profit of $28,883.53."
Image source: Getty Images
'Insider trading undermines investor confidence'
Back in November, Schlosser pleaded guilty to one count of trading while in possession of inside information and one count of communicating inside information to an associate.
ASIC deputy chair Sarah Court warned that her organisation would act against any behaviour that "damages the integrity of Australia's financial markets".
"Insider trading undermines investor confidence and gives individuals an unfair advantage," she said.
"This criminal outcome demonstrates the serious consequences for trading when in possession of inside information."
In addition to the sentence, Schlosser is disqualified from managing corporations for five years.
The court also ordered him to give up the $28,883.53 profit he made from the illegal trades.
Schlosser was released from custody immediately upon recognizance.
