Three Charged as SEC Investigates Insider Trading at Long Blockchain Corp.
Grow Your Business, Not Your Inbox
The U.S. Securities and Exchange Commission (SEC) has filed insider trading charges against three individuals amid an investigation into Long Blockchain Corp.
According to a press release the regulatory body issued on July 9, the crime occurred in advance of Long Blockchain Corp.’s announcement that it would “pivot” its business model from beverages to blockchain technology.
The company was formerly known as the Long Island Iced Tea Co., and its name change reportedly led to a sharp increase in its stock price. Reports have since indicated that regulators believe this rebrand was at the heart of the insider trading scheme.
Eric Watson, Oliver Barret-Lindsay, and Gannon Giguiere all face charges under the Securities Exchange Act. The SEC alleges that Watson, a shareholder of the Long Island Iced Tea Co., tipped off Barret-Lindsay, his friend, about the company’s planned adjustment.
According to the regulator’s press release, Watson had helped to drive the company towards changing the business. He had also signed a confidentiality agreement prohibiting him from revealing information about those changes.
Barret-Lindsay, in turn, showed the confidential information to his friend Giguiere, who proceeded to purchase 35,000 shares of Long Blockchain Corp. stock.
After the company formally announced its rebranding, its stock prices reportedly shot up by 380%. Giguiere capitalized on this spike and sold his shares for a $160,000 profit.
Under the SEC’s current complaint, all three individuals could face permanent injunctions and civil penalties. Watson, in addition, may face an officer and director bar.
Furthermore, this is not the first time both Barret-Lindsay and Giguiere have come under the SEC’s radar. Back in 2018, the regulator also charged both men in connection with a stock manipulation scheme. According to the SEC, this case still remains in litigation.Regulation response demanded from SEC
While pursuing their investigation into Long Blockchain Corp., as well as their ongoing suit against Ripple Labs, the SEC also faced questions about efforts to regulate cryptocurrencies.
On July 9, reports revealed that U.S. Senator Elizabeth Warren had sent a letter to the regulator’s chairman Gary Gensler. A letter in which she asked what the SEC was doing about crypto regulation. Senator Warren previously criticized the crypto space’s volatility and lack of regulation in remarks made on July 8.
Also in these remarks, she highlighted the lack of investor protection, and called on the SEC to use its authority to address this. According to reports, she demanded a response to her concerns from Gensler by July 28.This story was seen first on BeInCrypto