Crypto Craze Insider-Trading Suit Moves Ahead Against Promoter

Robert Burnson, Bloomberg News

Lights illuminate a ATX power connector cables inside a 'mining rig' computer, used to mine the Electroneum cryptocurrency, in Budapest, Hungary, on Wednesday, Jan. 31, 2018. Cryptocurrencies are not living up to their comparisons with gold as a store of value, tumbling Monday as an equities sell-off in Asia extended the biggest rout in global stocks in two years. Photographer: Akos Stiller/Bloomberg , Bloomberg

(Bloomberg) -- A stock promoter failed to persuade a judge to dismiss a US Securities and Exchange Commission insider-trading lawsuit in which he’s accused of illegally profiting from a company rebranding during the 2017 crypto craze.

Gannon Giguiere, owner of TheMoneyStreet.com, allegedly made a $162,500 by buying Long Island Ice Tea Corp. stock before the company changed its name to Long Blockchain Corp. Giguiere sold the stock hours after the rebranding.

Long Blockchain was among a number of obscure micro-cap companies that embraced 2017’s massive Bitcoin rally by announcing new business ventures focused on cryptocurrencies. They were rewarded with huge gains in their share prices, and scrutiny from regulators as to whether the descriptions were legitimate. Long Blockchain’s stock was delisted by the SEC in February 2021.

The SEC also sued Eric Watson, who owned 30% of Long Island Ice Tea, and Oliver Barret-Lindsay. Watson tipped his friend and broker Barrett-Lindsay to the name change, who then told his pal Giguiere, according to the SEC.

US District Judge Andrew Carter on Tuesday denied Giguiere’s request to dismiss the lawsuit against him, writing that the promoter “knew or should have known” that Lindsay-Barret got his information from “an insider breaching his duty.”

The case is Securities and Exchange Commission v. Watson, 1:21-cv-05923, US District Court, Southern District of New York (Manhattan).