When a beverage company attempted to dump the drinks business and join the blockchain bandwagon in 2017, the story became a comic symbol of cryptocurrency excess — and also sent the company’s stock soaring just months before crypto prices crashed.
The story isn’t so funny anymore, at least for Patrick Watson, a Long Blockchain investor who helped turn Long Island Iced Tea into a purported blockchain tech company. The Securities and Exchange Commission charged Watson and two others with insider trading on Friday.
The SEC said in a complaint that Watson “tipped his friend and broker, Oliver Barret-Lindsay,” of the company’s plan to “pivot from its existing beverage business to blockchain technology.” The company’s stock soared 183% on the day when the plan was announced.
Barret-Lindsay then told his friend Gannon Giguiere, who purchased 35,000 shares and then hours later sold those shares for more than $160,000 in profits, according to the complaint.
“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, in a news release.
The SEC’s complaint charges Watson, Barret-Lindsay, and Giguiere with violating securities laws and seeks permanent injunctions and civil penalties, along with an officer and director bar for Watson.