Insider Trading Charges Filed Over Long Island Iced Tea's Blockchain 'Pivot' (cnn.com) 17
CNN reports:
As the bitcoin craze took off in 2017, a Long Island iced tea company sent its share price spiking as much as 380% merely by announcing a "pivot" to blockchain technology. Long Island Iced Tea Corp. even changed its name to Long Blockchain Corp. 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... 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."
Even though the company had no actual business tied to blockchain at the time, and no experience in the cryptocurrency space, its Nasdaq-listed share price skyrocketed and trading volume spiked by 1,000%.
But the company's leading shareholder had told a broker/stockholder who'd then tipped off a stock-trading friend (who within two hours of the announcement ended up with "$160,000 in illicit profits," the SEC said). CNN adds that all three have now been charged with insider trading.
"The SEC said Long Blockchain was delisted by the Nasdaq in February for allegedly making a 'series of public statements designed to mislead investors and to take advantage of the general investor interest in bitcoin and blockchain technology.'"
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... 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."
Even though the company had no actual business tied to blockchain at the time, and no experience in the cryptocurrency space, its Nasdaq-listed share price skyrocketed and trading volume spiked by 1,000%.
But the company's leading shareholder had told a broker/stockholder who'd then tipped off a stock-trading friend (who within two hours of the announcement ended up with "$160,000 in illicit profits," the SEC said). CNN adds that all three have now been charged with insider trading.
"The SEC said Long Blockchain was delisted by the Nasdaq in February for allegedly making a 'series of public statements designed to mislead investors and to take advantage of the general investor interest in bitcoin and blockchain technology.'"
You heard it here first (Score:4, Insightful)
No insider trading: this is my public announcement that I'm renaming my Corp to XYZ Blockchain GameStop the sequel NFT Corp.
Pennies on the dollar (Score:2)
They got this insider tip which lead to 1000% gains for the stock and only made $160,000? They company was delisted and this bitch only put down $1,600 on this tip? That seems really shortsighted.
Re: (Score:3)
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Okay. So I am just an idiot. It makes more sense now. Thanks mate.
crock-chain (Score:1)
Re: (Score:2, Funny)
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It's called deterrence, one of the aims of laws.
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Learn English, you stupid cunt.
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People who make many millions, or billions (ahem, politicians) on insider trading are rarely prosecuted. They have more than enough to bribe the right people...and/or the smarts to avoid scrutiny.
Still small potatoes (Score:4, Insightful)
Insider trading is no laughing matter; that being said, $160k is chump change in the world of finance. Spouses of various Senators have been trading ahead of legislation for years, making millions of dollars. And of course it's all (mostly) legal.
Hehe charged with insider trading (Score:1)
I remember hearing about this "pivot" (Score:2)
I think it was around the same time Kodak announced something about crypto or blockchain.
Was wondering wtf was going on with all these established companies "pivoting" to something totally unrelated to their established business. But I do recall reading that Kodak share prices were up a bunch immediately after the announcement.
Stupidity .... lol
Also they don’t sell Long Island Iced Tea (Score:3)
Eric Watson (Score:2)
I know one of these guys.
Back in the day Eric Watson bought an Audi S8, which I've owned for fifteen years or so. And in another coincidence which is probably only amusing to me, we met one another at a formal dinner at the Cafe Royale in Piccadilly at the time he owned my car.
This guy has an interesting backstory and, it would be fair to say, a chequered history. The billionaire Owen Glenn [wikipedia.org] has spent a lot of money going after him.