Dive Brief:
- The Securities and Exchange Commission charged three people with insider trading in advance of an announcement by Long Blockchain Company (formerly the Long Island Iced Tea) that it was going to switch from beverages to blockchain technology.
- Eric Watson, a Long Blockchain control person who had signed a confidentiality agreement, shared a draft press release about the company’s upcoming business change with his friend and broker, Oliver Barret-Lindsay.
- Barret-Lindsay, in turn, allegedly shared the information to his friend, Gannon Giguiere, who bought 35,000 company shares.
Dive Insight:
The company's stock price rose more than 380% during the trading day after the news was officially release. Giguiere sold his shares for more than $160,000 in profits.
"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," said Richard Best, director of the SEC's New York regional office.
The SEC said Watson, Barret-Lindsay, and Giguiere violated the Securities Exchange Act of 1934.
The SEC previously charged Barret-Lindsay and Giguiere in connection with their alleged role in a stock manipulation scheme, which is in litigation. Lindsay and Giguiere pled guilty to criminal charges.
The SEC revoked the registration of Long Blockchain's securities on Feb. 19.
