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The United States Federal Bureau of Investigation (FBI) is probing the 2017 blockchain pivot of then-beverage firm Long Island Iced Tea (LTEA) for evidence of insider trading and securities fraud.
As per a search warrant request, first reported by Quartz, the FBI is seeking evidence related to a possible “pump-and-dump” scheme that involves the stock of LTEA.
Particularly, authorities want to gain access to encrypted messages held on a phone that was obtained in a securities fraud case at a different company called Kelvin Medical. The FBI believes that two people, Oliver Lindsay and Gannon Giguiere, who were arrested in that ongoing case, are involved in LTEA.
The agents suspected that the encrypted messages exchanged by Lindsay and other individuals contain evidence of discussion of “what appears to be confidential information regarding LTEA.” The warrant also pointed out that one of the messages could refer to “common aspects of a pump-and-dump campaign.”
The document also alleged Giguiere to be directly involved in the potential price manipulation as he bought a large sum of LTEA shares immediately before it shifted into a blockchain firm. Then, he and his wife sold all their shares when the price blew up, at an average of $7 per share, which was around 250% return.
Based on the current findings, authorities conclude that there is a probable cause to suspect that Lindsay and Giguiere had “conspired with each other and others to, and did, trade LTEA securities on the basis of material, non-public information,” which is against different laws.
Meanwhile, the U.S. Securities and Exchange Commission (SEC) recently sued a California resident for allegedly running a multi-million-dollar cryptocurrency Ponzi scheme worth $26 million.
