The FBI is investigating possible insider trading in Long Island Iced Tea

The US Federal Bureau of Investigation suspected insider trading in shares of Long Blockchain Corp., formerly known as Long Island Iced Tea (LTEA), and is attempting to obtain relevant evidence, according to the Quartz publication.

In particular, the FBI has already made a request for a warrant, which would give employees of the department access to the encrypted correspondence stored on the phone, seized during another case. This is an investigation into the likely securities fraud of Kelvin Medical.

Earlier, Oliver Lindsey and Gannon Giger were arrested as part of an ongoing investigation into the Kelvin Medical case. According to agents, the Lindsay phone has preserved correspondence proving insider trading with Long Blockchain Corp.

Recall, in December 2017, Long Island Iced Tea Corporation, which specialized in the production of cold tea and lemonade, changed its name to Long Blockchain Corporation, after which the value of its shares soared three times. According to its management, the company intended to explore investment opportunities in blockchain technology.

According to the FBI, in this correspondence, part of which was conducted before Long Island Iced Tea changed its name for the first time, Lindsey and others discussed confidential information about the company.

One of these persons, according to the document, is a certain Eric V. – As suggested in the department, we are talking about Eric Watson, who at the time of the rebranding was one of the largest investors of the company. Some of the messages exchanged between Lindsay and Eric W allegedly concerned pump-and-dump mechanisms, artificial hanging and reducing the cost of Long Island Iced Tea shares.

Also in the request for a warrant is the name of Julian Davidson, who at that time held the position of executive chairman of Long Island Iced Tea and was in active correspondence with Lyndsey in WhatsApp. At the same time, it is noted that no charges were brought against him, and he himself would leave his post before rebranding the company.

Be that as it may, the FBI believes that the data available to date makes it possible to suspect that Lindsay and Giger conspired between themselves and with other persons and traded Long Island Iced Tea shares on the basis of confidential information, thereby violating several laws.

Add that just a few months after the rebranding, in April 2018, Long Blockchain shares were withdrawn from trading on the Nasdaq Stock Exchange. The official reason for the company was the insufficient market capitalization of the company, but another possible reason for delisting could be the “public statements” of the representatives of Long Blockchain, who allegedly misled investors.

In August of the same year, Long Blockchain, by which time it had again changed its line of business to promote loyalty programs, received a subpoena from the US Securities and Exchange Commission (SEC). The company, however, did not disclose details of the requested documents.

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