According to the regulatory body, an investor was tipped off that the company would be rebranded, a move that resulted in a huge surge in Long Blockchain’s stock price.
The U.S. Securities and Exchange Commission has filed charges against three people accused of insider trading with the Long Blockchain Company related to changing its name from the Long Island Iced Tea Company.
In a Friday announcement, the SEC said Eric Watson, Oliver Barret-Lindsay, and Gannon Giguiere were facing charges in the U.S. District Court for the Southern District of New York for their role in trades connected to rebranding a beverage business to a blockchain firm, which caused the company’s stock price to rise significantly. Giguiere purchased 35,000 shares of Long Blockchain after having been allegedly tipped off to the change by Barret-Lindsay, who was first alerted by Watson.
The decision to change the firm from Long Island Iced Tea to Long Blockchain happened in early 2018. After the company rebranded to focus on blockchain development, the stock price surged by 289% — more than 380% intraday according to the SEC. Giguiere subsequently sold his shares for more than $160,000.
The regulatory group said Barret-Lindsay and Giguiere had already pleaded guilty to criminal charges in connection to a stock manipulation scheme, but it would be seeking permanent injunctions and civil penalties for the three individuals for its current case. In addition, it is attempting to prevent Watson from being an officer or director of any public company.
Founded in New York as a non-alcoholic beverage company in 2011, Long Island Iced Tea went on to shift its operations to blockchain and later focused on crypto mining. The SEC official delisted the company’s shares in February after it alleged the firm hadn’t produced any financial reports.