At the time, the episode underscored the excessive hype around the crypto space. Now, regulators say the name change was at the heart of an illegal insider trading scheme.
The Securities and Exchange Commission charged three people Friday with insider trading in advance of the announcement that sent Long Island Iced Tea Corp.’s stock price to the moon.
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