SEC discovered the crime occured prior to Long Blockchain Corp.’s declaration that it will “pivot” its business strategy away from beverages and toward blockchain technology.
Formerly known as the Long Island Iced Tea Co., the company’s name change is said to have resulted in a significant increase in its stock price. Since then, reports have emerged indicating that regulators believe this rebranding was at the heart of the insider trading scam and that the company was hacked.
Eric Watson, Oliver Barret-Lindsay, and Gannon Giguiere have all been charged with violations of the Securities Exchange Act, which was enacted in 1934. According to the SEC, Watson, a stakeholder in the Long Island Iced Tea Co., provided Barret-Lindsay, a friend, with information about the company’s intended adjustment.
According to the press release issued by the agency, Watson had assisted the company in its efforts to change its business model. In addition, he had signed a secrecy agreement, which prohibited him from disclosing any information regarding the alterations.
The sensitive knowledge was passed on by Barret-Lindsay to his friend Giguiere, who used it to purchase 35,000 shares of Long Blockchain Corp. stock, according to the company’s website.
Immediately following the formal announcement of the company’s renaming, its stock prices reportedly increased by 380 percent. Giguiere took advantage of the increase in the stock market and sold his shares for a profit of $160,000.
Permanent injunctions and civil fines might be imposed against all three people under the terms of the SEC’s present complaint. Aside from that, Watson may be subject to an officer and director barrenness.
Also noteworthy is the fact that this is not the first time that both Barret-Lindsay and Giguiere have come under the scrutiny of the SEC. Both men were previously accused by the SEC in connection with a stock manipulation conspiracy that occurred in 2018. According to the Securities and Exchange Commission, this matter is still pending.
The SEC has been requested to respond to a regulation
As they pursued their investigation into Long Blockchain Corp., as well as their current lawsuit against Ripple Labs, the Securities and Exchange Commission (SEC) was also confronted with issues regarding their attempts to regulate cryptocurrencies.
On July 9, it was disclosed that U.S. Senator Elizabeth Warren had written a letter to the chairman of the regulator, Gary Gensler, according to reports.
She wrote a letter in which she inquired as to what the Securities and Exchange Commission (SEC) was doing about cryptocurrency regulation. Senator Warren previously expressed her dissatisfaction with the volatility and lack of regulation in the cryptocurrency market in remarks made on July 8.
In addition, she brought attention to the absence of investor protection, and she called on the Securities and Exchange Commission to exercise its authority to remedy the issue. She reportedly wanted a response to her concerns from Gensler by July 28th, according to reports.