Economic news

Sigma Lithium’s former co-CEO fired for trading in blackout period

2023.12.04 15:51


© Reuters. FILE PHOTO: View shows Sigma Lithium Corp SGML.V production at the Grota do Cirilo mine in Itinga, in Minas Gerais state, Brazil April 18, 2023. REUTERS/Washington Alves/File Photo

(This Nov. 22 story has been corrected to reflect consequences for executives trading during blackout periods, not insider trading, in paragraph 13)

By Fabio Teixeira

RIO DE JANEIRO (Reuters) – The former co-CEO of Sigma Lithium (TSXV:), a leader in Brazil’s budding lithium sector, was fired earlier this year for trading its shares during a quarterly earnings blackout period, according to legal correspondence in a civil lawsuit, trading data and two people familiar with the matter.

Vancouver-based Sigma Lithium, which did not reply to questions about the dismissal, gave no reason to investors when announcing the exit of Calvyn Gardner, who was co-CEO with his wife Ana Cabral-Gardner until January 2023.

Gardner’s ouster touched off a series of lawsuits in Brazil and the United States, along with a broader management shakeup, revealing boardroom turmoil at the lithium miner as it tries to sell itself to car firms and big battery industry players.

Gardner and Cabral-Gardner, who are getting divorced, did not respond to requests for comment.

Previously unreported legal correspondence show the company told Gardner’s lawyers in a July letter that he was dismissed over share sales in January. His lawyers acknowledged those trades in a letter to Sigma in August, but said he had been unaware of the firm’s restrictions on what they described as “routine” trading.

Public data from Canada’s System for Electronic Disclosure by Insiders (SEDI) shows that Gardner sold 500,000 shares for about $13.3 million between Jan. 11 and 12, ahead of Sigma’s planned annual report.

It is not a crime to trade during a blackout period, two legal experts told Reuters, but any trades based on material nonpublic information would be considered a violation under North American securities law.

The company said in its July 31 letter to Gardner’s lawyers that he “possessed and may have used” privileged information “relating to the company’s ongoing M&A process” in the trades. In their Aug. 4 reply, his lawyers denied he had traded using any non-public material information.

Sigma, which is listed in Toronto and New York, did not respond to questions about its restrictions on insider trading.

The Canadian Securities Administrators did not reply to a request for comment on whether Gardner’s trades could be a securities violation and whether they were under investigation.

A U.S. Securities and Exchange Commission spokesperson declined to comment.

Blackout periods for trading by insiders are a common corporate restriction ahead of quarterly results, when executives and board members are most likely to have nonpublic information that could affect share prices.

Stephen Cohen, head of the regulatory practice at Sidley Austin LLP, said corporate discipline can vary for executives trading during blackout periods. Minor violations can lead to a warning, while trading with material nonpublic information is often a fireable offense, he said.

Gardner’s lawyers accused Sigma in the correspondence of acting disproportionately and in “bad faith” when it fired him. They cited the fact that another Sigma insider, Vicente Lobo Cruz, traded during a blackout period and went unpunished.

Cruz, who is co-chair of the Sigma board’s technical committee, sold 184,190 shares on Aug. 5, 2022, two weeks ahead of Sigma’s quarterly results, according to SEDI data.

Cruz did not reply to a request for comment. Reuters could not determine if Cruz was investigated or punished by Sigma.

Two people with knowledge of the situation said tension had been mounting last year between the co-CEOs, and Cabral-Gardner seized on her husband’s trading as justification to convince Sigma’s board members to fire Gardner.

After leaving Sigma, Gardner filed at least four lawsuits against his wife in Brazilian courts seeking to revert her decisions involving their shared assets. One of them included his lawyers’ correspondence with Sigma about his dismissal over the January trading.

In August, Sigma sued Gardner in New York, for allegedly misappropriating documents from the firm. Gardner has not commented on the case.

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 98,403.37 0.63%
ethereum
Ethereum (ETH) $ 3,364.47 1.18%
tether
Tether (USDT) $ 1.00 0.09%
solana
Solana (SOL) $ 254.49 0.11%
bnb
BNB (BNB) $ 662.98 1.37%
xrp
XRP (XRP) $ 1.45 1.99%
dogecoin
Dogecoin (DOGE) $ 0.434266 0.03%
usd-coin
USDC (USDC) $ 1.00 0.05%
cardano
Cardano (ADA) $ 1.03 3.88%
staked-ether
Lido Staked Ether (STETH) $ 3,361.14 1.16%
tron
TRON (TRX) $ 0.208911 1.56%
avalanche-2
Avalanche (AVAX) $ 41.88 0.68%
stellar
Stellar (XLM) $ 0.557048 11.66%
the-open-network
Toncoin (TON) $ 6.16 3.98%
shiba-inu
Shiba Inu (SHIB) $ 0.000026 0.61%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,994.91 1.08%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 98,018.26 0.49%
polkadot
Polkadot (DOT) $ 8.97 4.76%
chainlink
Chainlink (LINK) $ 18.04 2.75%
bitcoin-cash
Bitcoin Cash (BCH) $ 517.63 2.09%
weth
WETH (WETH) $ 3,362.28 1.29%
sui
Sui (SUI) $ 3.41 1.05%
pepe
Pepe (PEPE) $ 0.00002 1.33%
near
NEAR Protocol (NEAR) $ 6.73 8.56%
leo-token
LEO Token (LEO) $ 8.52 1.14%
litecoin
Litecoin (LTC) $ 97.97 1.18%
aptos
Aptos (APT) $ 12.45 2.67%
uniswap
Uniswap (UNI) $ 10.91 1.48%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,545.46 1.13%
hedera-hashgraph
Hedera (HBAR) $ 0.14846 2.61%
internet-computer
Internet Computer (ICP) $ 11.80 3.32%
usds
USDS (USDS) $ 1.00 0.28%
crypto-com-chain
Cronos (CRO) $ 0.191932 5.88%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.57814 1.73%
ethereum-classic
Ethereum Classic (ETC) $ 29.03 2.30%
render-token
Render (RENDER) $ 8.06 4.50%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.52 6.87%
kaspa
Kaspa (KAS) $ 0.153842 0.42%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.21%
bittensor
Bittensor (TAO) $ 523.32 1.32%
bonk
Bonk (BONK) $ 0.000048 0.84%
vechain
VeChain (VET) $ 0.043639 3.98%
arbitrum
Arbitrum (ARB) $ 0.858607 0.05%
whitebit
WhiteBIT Coin (WBT) $ 24.37 1.55%
dai
Dai (DAI) $ 1.00 0.21%
filecoin
Filecoin (FIL) $ 5.75 4.72%
cosmos
Cosmos Hub (ATOM) $ 8.78 6.43%
celestia
Celestia (TIA) $ 7.94 11.54%
okb
OKB (OKB) $ 55.43 8.08%
mantra-dao
MANTRA (OM) $ 3.65 0.95%