The so-called concept stocks.
According to foreign media Coindesk, the US Federal Bureau of Investigation (FBI) is investigating the infamous blockchain concept hype of 2017 Old Island Iced Tea Group to find evidence of insider trading and securities fraud.
In December 2017, during the bitcoin bull market, the beverage company (Long Island Iced Tea) unexpectedly turned to the blockchain, not only changed its name to Long Blockchain Corp, but also said it would purchase a large number of bitcoins. The mining machine participated in the investment in the blockchain field. As soon as the news came out, the company's share price soared by 300%.
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However, the company was exposed to a serious loss before the exposure to the blockchain, and the funds held were not able to purchase the promised 1,000 mining machines. In February 2018, Long Island Iced Tea was delisted from Nasdaq and was summoned by the US Securities and Exchange Commission (SEC) for doubts about its shareholding. Then there will be no more news.
According to the latest news, the FBI found information about the insider trading of Long Island Iced Tea in the unlocking of the encrypted information in the seized mobile phone while searching for another company in Kelvin Medical's alleged securities fraud case. The FBI now suspects that the company's transition to the blockchain and the corresponding increase in prices since then is actually a premeditated market manipulation.
If the suspicion is confirmed, then before the company announces that it will turn to the blockchain, the stock salesman will buy at a low price of around $2 and then sell after the price climbs.
Based on the search warrant application, the FBI found a person named Gannon Giguiere who was directly involved in potential price manipulation and purchased a large stock of Long Island Iced Tea before the company's blockchain announcement.
Giguiere and his wife sold all their stocks after the stock price surged, selling at an average price of $7 per share, with a return of around 250%. However, after the transition of the blockchain, the company quickly delisted from the Nasdaq Stock Market. The company has previously warned investors that it faces the risk of being delisted because the SEC believes that the company "published a series of public statements aimed at misleading investors and using investors on bitcoin and blockchain The general interest in technology."
In the search warrant application, the US Federal Bureau of Investigation (FBI) noticed that Giguiere had frequent contact with another person, Oliver Lindsay, because most of the accusations they were accused were on WhatsApp, and federal agencies were requesting permission to search both. Mobile phones to obtain further electronic communications as evidence of potential insider trading and securities fraud.
The document also stated that Giguiere is not the only object associated with Lindsay. In addition, there is a contact person called “Eric W” who exchanges information with Lindsay. Their conversation information has involved “raising shipments”. The FBI agent who submitted the search warrant said that according to other evidence in the case, Eric W is actually Eric Watson. According to public information, Watson is a major investor in Long Island Iced Tea.
Another suspect was Julian Davidson, and Lindsay sent him a WhatsApp text message. Although there is no evidence to prove the collusion between them, it is worth noting that Davidson was the executive chairman of the Long Island Iced Tea Group and left the company a few days before the Long Island Iced Tea Transformation blockchain.
As a result, FBI agents concluded in the search warrant that, based on the results of the survey so far, there may be reasons to suspect that Lindsay and many people, including Giguiere, “crossed each other and traded LTEA on the basis of non-public and important information. Securities" violates a number of laws.
Original article, author: Aloe
Source: Planet Daily
Violation of laws and regulations