Three New Charges Further Solidify Fraud Claims By Long Blockchain Corp.
Businesses across the globe have jumped onto the crypto train in recent years, hoping to take advantage of the soaring popularity and low prices as the industry continues to grow. But one company in particular may have become a bit too enthusiastic, with a new lawsuit alleging that an entire blockchain-based directional shift may have actually been based around fraud.
According to recent reports, Long Blockchain Corp, formally known as Long Island Iced Tea Corp, currently has three company affiliates under investigation by the SEC for insider trading. SEC agents claim that Eric Watson, Long Blockchain’s majority shareholder, provided inside information to broker Oliver Barrett-Lindsey about the company’s transformation as a blockchain focused organization prior to the official announcement. Not long after this information was revealed to Barrett-Lindsay, he purchased 35,000 shares of the company’s stock, and also passed this information along to friend Gannon Giguiere.
It should be noted that prior to Long Island Iced Tea Corp’s name change, the company had absolutely no involvement in crypto, blockchain, or any relevant technologies. Despite this being known to investors, the announcement sparked a massive surge in stock activity for the company, with share prices rising nearly 380%.
The SEC claims that the name change and brand redirection were elements of a greater plan related to fraudulent activity, which resulted in the government agency removing Long Blockchain from the NASDAQ, claiming company leaders misled investors and attempted to capitalize on the crypto-craze.
"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," Richard Best, Director, SEC's New York regional office.
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Edited by Maurice Nagle
