According to the regulatory agency, an investor was tipped off about the company’s rebranding, which caused the stock price of Long Blockchain to skyrocket.
The US Securities and Exchange Commission has charged three people with insider trading in connection with the Long Blockchain Company’s rebranding from the Long Island Iced Tea Company.
The Securities and Exchange Commission announced on Friday that Eric Watson, Oliver Barret-Lindsay, and Gannon Giguiere were charged in the United States District Court for the Southern District of New York for their roles in trades related to rebranding a beverage company as a blockchain firm, which caused the company’s stock price to skyrocket. After being purportedly tipped off to the move by Barret-Lindsay, who Watson first warned, Giguiere purchased 35,000 shares of Long Blockchain.
In early 2018, the company changed its name from Long Island Iced Tea to Long Blockchain. According to the SEC, the stock price increased by 289 percent — more than 380 percent intraday, when the company renamed to focus on blockchain development. Following that, Giguiere sold his stock for more than $160,000.
Barret-Lindsay and Giguiere had already pleaded guilty to criminal charges in connection with a stock manipulation scam. Still, the regulatory organization said it would pursue permanent injunctions and civil fines for the three people in this instance. It also aims to bar Watson from serving as an officer or director of any publicly traded firm.
Long Island Iced Tea began as a non-alcoholic beverage firm in New York in 2011 but has shifted its focus to blockchain and crypto mining. The company’s shares were delisted by the SEC in February after the agency claimed it hadn’t filed any financial reports.