In the latest setback to befall the Tezos project, co-founder Arthur Breitman has been sanctioned by FINRA. Breitman is barred from contact with broker-dealers for two years and has been fined $20,000.
In a settlement agreement dated April 18, the Financial Industry Regulatory Authority (FINRA) suspended Tezos co-founder Arthur Breitman from associating with broker-dealers for two years and assessed him a $20,000 fine. Per Reuters[1], Breitman neither admitted to nor denied making false statements about his outside business activities while he was an employee of Morgan Stanley and registered member of FINRA.
An attorney for Breitman, Sarah Lightdale, said in a statement, "The settlement with FINRA is unrelated to and has no impact on the launch of the Tezos network."
In addition to the trouble that FINRA's actions could cause for Tezos' highly anticipated but not yet launched network, the company continues to face the specter of its associated tokens (Tezzies) being deemed securities. If the principals behind Tezos are found by the US Securities and Exchange Commission (SEC) to have sold unregistered securities, this could trigger SEC penalties and additional sanctions[2] from FINRA.
In February, at UCLA's Cyber Days[3], ETHNews asked Kathleen Breitman – Arthur's business partner and wife – whether Tezos was under investigation by the SEC. She declined to address the inquiry directly. Breitman shifted uncomfortably in her chair and said that she does not regard Tezos as a securities offering.
If the SEC is in fact investigating the issues and disagrees with her opinion, Tezos and its associated partners could be compelled to return all of the bitcoin and Ether that they received. They are currently defendants[4] in multiple class-action[5] lawsuits[6] seeking that relief, which allege that the Tezos initial coin offering (ICO) constituted the
