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.'”
Read more of this story at Slashdot.
Go to Source of this post
Author Of this post: EditorDavid