SEC charges three individuals with insider trading in Long Blockchain stock
The United States Securities and Exchange Commission (SEC) today charged three individuals with insider trading in advance of an announcement by Long Blockchain Company (formerly known as Long Island Iced Tea Co.) that it was going to “pivot” from its existing beverage business to blockchain technology, which caused the company’s stock price to soar.
According to the SEC’s complaint, filed in the New York Southern District Court, Eric Watson, an undisclosed control person of Long Blockchain who helped drive this business change within the company and signed a confidentiality agreement not to disclose the company’s business plans, tipped his friend and broker, Oliver Barret-Lindsay, of such plans, including by sharing with him a draft of the company’s press release.
Barret-Lindsay, in turn, allegedly passed the material nonpublic information on to his friend, Gannon Giguiere. Within hours of receiving this confidential information, Giguiere purchased 35,000 shares of Long Blockchain stock.
According to the complaint, the company’s stock price skyrocketed after the press release was issued, spiking more than 380% intraday. Within two hours of the announcement, Giguiere sold his shares for over $160,000 in illicit profits.
The SEC’s complaint charges Watson, Barret-Lindsay, and Giguiere with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions and civil penalties as to all defendants, and, additionally, an officer and director bar as to Watson.
The regulator previously charged Barret-Lindsay and Giguiere in connection with their alleged role in a stock manipulation scheme, which is currently in litigation. Both Lindsay and Giguiere pleaded guilty to criminal charges in connection with that matter.
As FX News Group has reported, the Commission revoked the registration of Long Blockchain’s securities in February 2021, pursuant to Section 12(j) of the Exchange Act. The SEC noted back then that LBCC had failed to comply with Section 13(a) of the Exchange Act and Rules 13a- 1 and 13a-13 thereunder in that it had not filed an annual report on Form 10-K since the period ended December 31, 2017.
The company is also delinquent in filing quarterly reports, having not filed a Form 10-Q since the period ended September 30, 2018.