You can get pretty jaded covering financial services. There are so many shady deals, so much backstabbing and deception, such a wide array of malfeasance that sometimes you think you’ve seen it all. And then something so unexpected, so genuinely shocking happens that it shakes you to your core and makes you feel like a complete innocent.
For who could ever imagine that a guy who isn’t from Long Island but moved there anyway to set up a soft drink company called Long Island Iced Tea Corp that didn’t sell Long Island iced tea (because, again: soft drink company) before it stopped selling iced tea entirely to “pivot” to something blockchain related in spite of having no business in the blockchain space or any experience or expertise therein, and who fraternized with two people (also, incredibly, not from Long Island) who already dabbled in securities fraud, might not have done so with the purest motives? Not us, that’s for sure.
Eric Watson, Long Island Iced Tea's leading shareholder, tipped off a friend and broker, Oliver Barret-Lindsay, about the coming name change by sharing a draft of the company's press release, according to a complaint filed by the SEC in the US District Court for the Southern District of New York.
The SEC said that Barret-Lindsay, a Canadian citizen who owned a firm incorporated in the Cayman Islands, then shared that material nonpublic information with a friend named Gannon Giguiere, who owned and operated a stock promotion website.
"Within hours of receiving this confidential information, Giguiere purchased 35,000 shares of Long Blockchain stock," the SEC said.
The next day, December 21, 2017, Long Island Iced Tea Corp., until that point exclusively a soft drink maker, announced its makeover, describing the pivot to blockchain as a "once-in-a-generation opportunity…." "Within two hours of the announcement, Giguiere sold his shares for over $160,000 in illicit profits," the SEC said.
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