The SEC has subpoenaed Long Blockchain after changing its name and seeing its stock rise dramatically by 289% in December 2017.
Long Blockchain Corp is an American corporation based in Farmingdale, Long Island, New York. Its wholly-owned subsidiary Long Island Brand Beverages, LLC produces ready-to-drink iced tea and lemonade under the “Long Island” brand. The company was formally known as Long Island Iced Tea Corp before using crypto’s basic foundation to promote its “globally scalable blockchain technology solutions”.
This has, unfortunately for the company, drawn the wrong kind of attention from the SEC and has resulted in the company canceling its plans to raise several million dollars through a stock offering and purchase 1,000 Bitcoin mining rigs. A company spokesperson said:
“The company is fully cooperating with the SEC’s investigation… The company cannot predict or determine whether any proceeding may be instituted by the SEC in connection with the subpoena or the outcome of any proceeding that may be instituted.”
Long Blockchain was removed from Nasdaq in April after being accused by the exchange of misleading its investors, resulting in it failing to retain the minimum value to validate it remaining on the exchange. Having shot up to USD 70 million after losing the “iced tea” handle and adding blockchain to its new company name, it is now down to a value of about USD 5 million.
An amusing reference by chance in January was made in an SEC address when Chairman Jack Clayton that the SEC might look into any company “dumb enough” to change its name to “Blockchain-R-Us” and then sell stock without “providing adequate disclosure… about those changes and the risks involved”. He said at the time:
“The SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed ledger technology and whether the disclosures comply with the securities laws, particularly in the case of an offering.”
That statement does appear to be pointing a finger in a certain direction. Long Island Iced Tea Corp changed its name or “business model”, as Clayton might prefer to call it, in November 2017.
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