Tezos is embroiled in controversy once again as co-founder Arthur Breitman is slapped with a fine and a trading ban for two years by The Financial Industry Regulatory Authority (FINRA).
Breitman Fined $20,000
The Wall Street regulatory body has come to a settlement with Breitman after he was accused of making false statements about his side venture (Tezos) while he was actively employed at Morgan Stanley. All registered FINRA securities professionals are required to report any for-profit activity outside of their stated employment if there is “reasonable expectation of compensation.”
The regulatory action stems from a Reuters article published in October that found Breitman, who is registered with FINRA as a French citizen, never disclosed the work he was doing for Tezos while still employed at Morgan Stanley between 2014-2015.
Among the evidence that Reuters published in its article is a business plan written in 2015 that lists Brietmen as chief executive and makes projections on the potential for the company to be worth as much as 20 billion dollars over 15 years. They also cited two papers Breitman penned under the pseudonym L.M. Goodman about Tezos, showing that he purposely sought to conceal his connection with the company.
FINRA concluded in its settlement agreement that “Breitman did not notify Morgan Stanley at any time that he was engaging in these outside business activities,”
The settlement conditions dated April 18 are that Breitman avoid any dealing with broker-dealers for two years and pay a $20,000 fine.
Breitman neither admits nor denies the charges. His lawyer Sarah Lightdale released a statement saying
“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.”
A Series of Conflicts
The Tezos foundation raised $232 million from their initial coin offering last July in order to build their blockchain network for smart contracts but still haven’t delivered any of the cryptocurrency to contributors due to infighting and legal problems in and outside of the boardroom.
The project’s release was originally delayed by problems between founders, Kathleen and Arthur Breitman and Johann Gevers. Gevers finally stepped down from his position as President of the Tezos Foundation under accusations from the Breitmans that he had attempted to embezzle funds and was acting as a hurdle to the progress of their mission.
Other delays came in the form of class action lawsuits brought against Tezos from contributors alleging securities fraud and rumors that the SEC has an ongoing investigation into the foundation.
The latest word from Tezos on Reddit is that they will finally launch their token by late spring.