When Long Island Iced Tea Co. (now called Long Blockchain Corp.) decided to drop the beverage business and jump into blockchain, the company’s stock soared — now three men stand accused of insider trading based on their knowledge of the planned shift.

In a complaint filed in the U.S. District Court for the Southern District of New York, the U.S. Securities and Exchange Commission (SEC) charged three people with insider trading based on their alleged advance knowledge of Long Island Iced Tea Co.’s pivot to become Long Blockchain Corp.

The SEC alleged that Eric Watson, who secretly owned 30% of the company’s shares, tipped his friend — Oliver-Barret Lindsay, a Vancouver-based broker and principal of a Cayman Islands-based brokerage firm called CMGT Capital Management — to the company’s plans. In turn, Lindsay allegedly tipped a friend, Gannon Giguiere.

“Within hours of receiving this confidential information, Giguiere purchased 35,000 shares of Long Blockchain stock,” the SEC said.

“According to the complaint, the company’s stock price skyrocketed after the press release was issued, spiking more than 380% intraday. Within two hours of the announcement, Giguiere sold his shares for over $160,000 in illicit profits,” the regulator added.

These allegations have not been proven.

The SEC is seeking permanent injunctions and civil penalties against all three men, and an officer and director ban against Watson.

Back in 2018, Lindsay and Giguiere were charged by the SEC in connection with a micro-cap pump-and-dump scheme. That case remains in litigation, although both pled guilty to related criminal charges. They have yet to be sentenced.

“The SEC remains committed to preventing all types of fraudulent conduct in connection with purported ‘crypto’ companies, including profiting from trading on material non-public information,” said Richard Best, director of the SEC’s New York office, in a release.