SEC Sues 3 for Insider Trading Over Long Island Tea’s “Blockchain” Rebranding During 2017 Bull Run
The US Securities and Exchange Commission (SEC) has sued three individuals involved in the inside trading of Long Island Tea Corp., which enjoyed a surge in its stock prices after it rebranded to Long Blockchain Corp. during the 2017 bull market.
According to a statement released by the SEC, Eric Watson, an “undisclosed control person” of the company, drove this name change of the business and tipped off his friend and broker, Oliver Barret-Lindsay, about the “pivot” that was going to happen from its existing beverage business to blockchain technology, causing the company’s stock price to soar.
Barret-Lindsay then told his pal, Gannon Giguiere, who made more than $160k in illegal profits, the SEC said.
Long Blockchain share prices soared more than 380% in December 2017 after the company issued a press release announcing its new name. Richard R. Best, head of the SEC’s New York office in the statement said,
“The SEC remains committed to preventing all types of fraudulent conduct in connection with purported ‘crypto’ companies, including profiting from trading on material non-public information.”
Long Blockchain was one of the micro-cap companies that capitalized on the 2017 crypto bull run by announcing crypto-focused new business ventures. Its stock was delisted by the SEC in February.