Advertisment

The Financial Industry Regulatory Authority (FINRA), has taken action against Tezos co-founder Arthur Breitman. The Wall Street regulator has fined Mr. Breitman $20,000 USD, banning Tezos from associating with broker-dealers for two years. It’s part of a settlement following FINRA’s accusations that the crypto company’s co-founder made false statements regarding the project whilst employed at Morgan Stanley.

Also Read: Bitcoin Cash Smashes Through $1,000 USD

Tezos Co-Founder Settles With FINRA

Trading Sanctions Imposed on Tezos Co-Founder Amid FINRA SettlementArthur Breitman and FINRA have agreed to a settlement pertaining to allegations that Mr. Breitman made false statements regarding the project whilst he was an employee of Morgan Stanley. The allegations appear to have spurred by an October 2017 article published by Reuters that purported to evidence Mr. Breitman’s deliberate attempts to conceal his involvement with Tezos while working at the firm.

The report stated that “In the summer of 2014, while working at Morgan Stanley in quantitative finance, Breitman released two papers online that presented his concept for a new type of blockchain,” which were authored under the pseudonym “L.M Goodman.” Reuters claims to have reviewed “emails and messages” sent by Mr. Breitman that confirmed he authored said 2014 documents, in addition to an email sent by Mr. Breitman in early 2015 outlining that “he was seeking to create a business based on Tezos but was trying not to be associated publicly with the project at the time” due to concerns “that his activities might conflict with his employment at Morgan Stanley.”

Mr. Breitman Conceals Involvement With Tezos

Trading Sanctions Imposed on Tezos Co-Founder Amid FINRA SettlementReuters also detailed an early 2015 “Tezos Business Plan” that listed Mr. Breitman as the company’s chief executive. In August of the same year, Mr. Breitman established the company Dynamic Ledger Solutions Inc with himself as the chief executive, through which Tezos would be developed.

FINRA mandates that registered securities professionals divulge information pertaining to external business activities to their employers in the event that there is a “reasonable expectation of compensation.” As the 2015 Tezos Business Plan had anticipated that Mr. Breitman should receive a $212,180 USD annual salary by the third year of the company’s existence, Mr. Breitman was determined to have failed to report his “other business activities,” prompting action from FINRA.

In the settlement agreement between Mr. Breitman and FINRA, the regulator concluded that “Breitman did not notify Morgan Stanley at any time that he was engaging in these outside business activities.” The agreement also noted that “Breitman’s use of the L.M. Goodman pseudonym to promote Tezos […] effectively concealed Breitman’s involvement with Tezos from” his former employer.

Sarah Lightdale, an attorney representing Mr. Breitman, has sought to move the attention away from the settlement. “The settlement with FINRA is unrelated to and has no impact on the launch of the Tezos network. Arthur cooperated fully with FINRA at all times and Arthur is pleased to put this personal matter behind him,” she said.

Crypto Industry Must Exercise Greater Regulatory Savvy

Trading Sanctions Imposed on Tezos Co-Founder Amid FINRA SettlementThe ever complicating Tezos story highlights the need for initial coin offering issuers to fully comprehend the regulatory requirements of their jurisdiction, and the potential legal ramifications of non-compliance.

Speaking to Reuters in June, Tezos co-founder and chief executive officer, Kathleen Breitman, sought to address concerns pertaining to the adequacy of the couple’s previous disclosures of pertinent information during the project’s infancy. “We made all the proper disclosures. It was a hobby, you know. And like there was never any intention to really commercialize any of the software. We had some meetings with like C-suite executives at banks … but honestly nothing serious.”

Do you think that the regulatory and legal issues that have beleaguered Tezos will negativity how the markets preform once the company’s network is launched? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Tezos


At news.Bitcoin.com all comments containing links are automatically held up for moderation in the Disqus system. That means an editor has to take a look at the comment to approve it. This is due to the many, repetitive, spam and scam links people post under our articles. We do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.  

The post Trading Sanctions Imposed on Tezos Co-Founder Amid FINRA Settlement appeared first on Bitcoin News.

Get the latest Bitcoin News on The Bitcoin News
Our Social Networks:
Facebook Instagram Pinterest Reddit Telegram Twitter Youtube