CASE DISMISSED: LANDMARK DECISION IN UNITED STATES SECURITIES LAW U-TURN
A word from our CEO
CEO Scott Sciberras takes us through the landmark win in United States securities law U-turn
Commenting on the dismissal, Whiskey & Wealth Club CEO Scott Sciberras said he was struck by the harshness of the conflicting approach of the TSSB between justice and trial by media, saying that the policies and procedures employed by the State Board could have significant financial and reputational ramifications for any business.
REPUTATION RESTORED: TEXAS REGULATOR’S ‘FRAUD’ CASE AGAINST WHISKEY & WEALTH CLUB DISMISSED IN SPECTACULAR LEGAL U-TURN
- Texas State Securities Board had accused the wholesaler of premium grade Scotch and Irish Whiskey of engaging in fraud – statements that have now been fully withdrawn in alandmark decision for the whisk(e)y industry
- Regulator says Whiskey & Wealth Club is free to trade pallets and casks of Scotch and Irish whiskey in the United States
- The ill-advised case was dismissed after the cask wholesaler presented evidence of the inner workings of its highly regulated business model in Ireland and the United Kingdom
- All 7 allegations made by the Board were completely retracted in what amounts to an apology by the U.S. agency.
A securities fraud case against the Whiskey & Wealth Club has been dismissed in a landmark decision for the cask whisk(e)y industry.
Leading media outlets from around the world have been reporting on the victory for the wholesaler of premium grade Scotch and Irish Whiskey, after the Texas State Securities Board made a spectacular securities law u-turn.
The U.S. agency retracted all 7 accusations against Whiskey & Wealth Club, confirming that it did not offer or sell securities or act as dealers, and they did not engage in wilful violations of the Securities Act, including fraud.
The final resolution rightfully abandons – in their entirety – all of the allegations that the Whiskey & Wealth Club was operating a securities offering in violation of U.S. securities laws. Such dismissals are exceedingly rare and only afforded where clearly warranted. The fact Whiskey & Wealth Club obtained the dismissal is a testament to what it has said all along: the allegations were clearly flawed.
“Our business model and our company have been totally vindicated,” said Whiskey & Wealth co-founder Mr. Jay Bradley. “Our reputation as honest cask wholesalers has been restored and justice has been served”.
Mr. Bradley and his Dublin and London-based team had been fighting an 8-month legal case that begun with an emergency cease and desist order on November 2nd, 2021.
On the same day as the order, the Securities Commissioner Travis J. Iles delivered a media release entitled “Risky Whiskey”, which accused Whiskey & Wealth Club of engaging in illegal activity by selling unregistered securities in the USA.
“We are delighted to finally put these outrageous allegations behind us. Allegations that cast a dark shadow over our cask business in the United States,” Mr. Bradley said. “Through this ordeal however, our loyal customers and our loyal staff never wavered – even with a meritless lawsuit hanging over us. We can now focus on expanding our business in the U.S. and across the world”.
He added: “The case cost us a sizable amount of money in legal fees, drained resources, and defamed our company. However, the victory now paves the way for our cask wholesale business to flourish in the United States and around the world”.
The Securities Board asserted that Whiskey & Wealth Club had violated United States securities statutes, and specifically, that investments tied to pallets of whiskey are securities.
In a damaging statement, the Board even accused the company of “engaging in fraud in connection with the offer for sale of securities” which threatened to do the public “irreparable harm” – statements they have now totally retracted.
The agreement to dismiss these unfounded accusations was filed on July 7th, 2022, in which the Texas agency found that Whiskey & Wealth Club did not engage in illegal acts in connection to the offer or sale of securities and did not make statements to deceive the public.
The Board also dismissed allegations and orders against individual Whiskey & Wealth employees, namely: Scott Sciberras, William Fielding, Alex Mook, Richard Falconer and Benjamin Dunlop.
The Regulator and Whiskey & Wealth Club have now agreed to work more closely in relation to one of the world’s best performing asset classes, as prices and demand for Irish whiskey, scotch, bourbon, Japanese, and Australian whisky continue to grow at a double-digit rate.
Commenting after the legal victory, Whiskey & Wealth Club co-founder and CEO Mr. Sciberras said he was surprised by the harshness of the United States conflict between justice and trial by media, saying that the policies and procedures employed by the State Board could have significant financial and reputational ramifications for any businesses.
“We believe the U.S. practice of issuing a damaging press release on the same day as a legal order, without seeing or hearing any evidence, even going as far as to accuse a company of fraud – and then retracting all of those allegations 8 months later, could have a disastrous impact on most businesses. This kind of legal and public relations strategy – where a State agency shoots first and asks questions later – is unheard of in Ireland, the UK, or commonwealth countries.
“Fortunately for us, we were able to weather this storm thanks to our incredibly loyal client base and new customers, who were able to see beyond the statements and accusations made by the Texas State Securities Board”.
Mr. Sciberras added: “We have worked closely with the Securities Board to educate them on the process of wholesale cask whiskey buying and selling, and on how our business model works, and we will continue to work with them in the future”.