An iced tea manufacturer surprisingly changed its core business to blockchain technology at the end of 2017. The company has now disappeared from the stock exchange. Meanwhile, the SEC is sounding the alarm about insider trading.
The US Securities and Exchange Commission (SEC) filed charges against three Americans on July 9th. The men are said to have enriched themselves with inside information as part of the business realignment of the Long Island Iced Tea Company.
In 2017, the then ailing ice tea producer announced that distributed ledger technology should be the future business focus of the renamed Long Blockchain Company. Not a random step, because the year was dominated by the first big Bitcoin bull run. Stock prices rose rapidly for a short period of time before falling as expected. The FBI took an investigation on. Suspicion: insider trading.
SEC: illegal gain of $ 160,000
The investigative authorities should be right. The current press release the SEC indicates that one of the defendants, Eric Watson, played a key role in the ice cream manufacturer’s renaming plans as a senior executive. Accordingly, although Watson had signed a confidentiality agreement, he still forwarded details of the plan to the befriended broker Oliver Barret-Lindsay. He informed his friend Gannon Giguiere, who bought 35,000 shares in the company.
After the ice cream maker went public with its plans, the company’s share price rose 380 percent within a day, according to the SEC. Just two hours later, Giguiere sold his shares. It made $ 160,000 in profits.
Watson and the two brokers now have a civil case on their hands. In the case of Watson, the SEC is also demanding a ban that prohibits him from holding any executive position in the future. The SEC is bringing criminal proceedings against Barret-Lindsay and Giguiere. The two already pleaded guilty there.
It remains unclear whether the Long Blockchain Company actively entered the DLT business. A change to the mining business was also on the horizon. The fact is that the SEC took the company off the stock exchange in February 2021. Annual reports were missing.