Trio Accused Of Insider Trader After Rebranded Company's Stock Surged

The Securities and Exchange Commission has charged three people with insider trading on allegations they bought shares of a New York company before its announcement it would "pivot" to a surprise name change and new business model.

Three people have been charged with insider trading after the SEC says they bought shares of a company before its announcement it would "pivot" to a new business model.
Photo Credit: *Pixabay/Maklay62*

Joe Lombardi

07/10/2021 8:50 a.m.

Eric Watson, an undisclosed control person of Long Island-based Long Blockchain, drove the business change during the 2017 crypto craze and tipped off his friend and broker, Oliver Barret-Lindsay, according to the SEC's complaint, filed in the United States District Court for the Southern District of New York on Friday, July 9.

Long Blockchain, based in the Village of Farmingdale in Nassau County, had been an iced-tea company called the Long Island Ice Tea Corp. before it was rebranded to the blockchain-based business model amid the bitcoin frenzy.

Barret-Lindsay, in turn, allegedly passed the material nonpublic information on to his friend, Gannon Giguiere, the complaint said, adding that "within hours of receiving this confidential information, Giguiere purchased 35,000 shares of Long Blockchain stock."

Within hours of receiving this confidential information, Giguiere purchased 35,000 shares of stock in Long Blockchain.

According to the complaint, the company's stock price skyrocketed after a press release was issued, spiking more than 380 percent intraday. Within two hours of the announcement, Giguiere sold his shares for over $160,000 in illicit profits.

"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 R. Best, Director of the SEC's New York Regional Office.

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, and, additionally, an officer and director bar as to Watson.

The SEC 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. Additionally, the commission revoked the registration of Long Blockchain's securities on Feb. 19, 2021.

Click here to follow Daily Voice Westport and receive free news updates.