Litigation Releases (Eric J. Watson et al.)

U. S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26124 / September 24, 2024

Securities and Exchange Commission v. Watson et al.,

No. 1:21-cv-05923 (S.D.N.Y. filed July 9, 2021)

SEC Obtains Final Judgment in Insider Trading Case

On September 20, 2024, the Securities and Exchange Commission obtained a final judgment against defendant Oliver-Barret Lindsay, a Canadian citizen, whom the SEC previously charged with insider trading in advance of an announcement by Long Blockchain Company (formerly known as Long Island Iced Tea Co.) that it was going to "pivot" from its existing beverage business to blockchain technology, which caused the company's stock price to soar.

The SEC's complaint was filed on July 9, 2021, in federal district court in the Southern District of New York. The complaint alleged that Lindsay's co-defendant Eric Watson, a Long Blockchain insider who had signed a confidentiality agreement not to disclose the company's business plans, tipped Lindsay about Long Blockchain's unannounced plans to pivot to blockchain technology. The complaint further alleged that Lindsay then tipped his friend and co-defendant, Gannon Giguiere, who purchased 35,000 shares of Long Blockchain stock within hours of receiving confidential information about Long Blockchain from Lindsay. According to the complaint, the company's stock price skyrocketed after a press release was issued announcing its shift to blockchain technology. The complaint further alleged that within two hours of the announcement, Giguiere sold his shares for over $160,000 in illicit profits.

Without admitting or denying the SEC's allegations, Lindsay consented to entry of a final judgment permanently enjoining him from violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and ordering him to pay a civil monetary penalty of $75,000.

The SEC's litigation is being led by Chevon Walker, Mary Kay Dunning, and Lindsay S. Moilanen and is being supervised by Preethi Krishnamurthy and Sheldon L. Pollock.