Rep. Madison Cawthorn may have committed insider training and participated in a pump-and-dump scheme, according to a media report, and a high-ranking GOP colleague wants him investigated.
On Tuesday, The Washington Examiner reported that multiple ethics officials believe Cawthorn ran afoul of federal laws when he promoted the Let’s Go Brandon cryptocurrency on Instagram last year. The cryptocurrency borrows its name from an anti-Joe Biden meme first popularized during a NASCAR race.
“LGB legends. … Tomorrow we go to the moon!” Cawthorn wrote under a photo of him and LGB founder James Koutoulas on December 29th.
The cryptocurrency announced a key endorsement the next day, causing its value to skyrocket.
The Examiner fills in the details:
NASCAR driver Brandon Brown announced on Dec. 30 that the meme coin would be the primary sponsor of his 2022 season, causing LGBCoin’s value to spike by 75%. Brown’s statement featured comments from Koutoulas, who was pictured with Cawthorn just a few hours prior.
Multiple watchdog groups told the Washington Examiner that Cawthorn’s Dec. 29 Instagram post suggests the lawmaker may have had advanced nonpublic knowledge of LGBCoin’s deal with Brown. The watchdogs said the post, combined with Cawthorn’s statement that he owns LGBCoin, warrants an investigation from the Department of Justice and the Securities and Exchange Commission to determine whether the lawmaker violated federal insider trading laws.
“This looks really, really bad,” said Dylan Hedtler-Gaudette, the government affairs manager for Project on Government Oversight, a federal watchdog group. “This does look like a classic case of you got some insider information and acting on that information. And that’s illegal.”
On Wednesday morning, Republican Sen. Thom Tillis tweeted “Insider trading by a member of Congress is a serious betrayal of their oath, and Congressman Cawthorn owes North Carolinians an explanation. There needs to be a thorough and bipartisan inquiry into the matter by the House Ethics Committee.”
Tillis and Cawthorn both represent North Carolina in Congress.
NASCAR ultimately rejected Brown’s endorsement and the combined value of all Let’s Go Brandon cryptocurrency fell from $570 million to zero. It has since recovered a fraction of its value.
The Examiner adds:
The swift rise and fall of the meme coin led one jilted investor to file a class-action lawsuit in April accusing Koutoulas and other LGBCoin insiders of using the digital currency to orchestrate a pump-and-dump scheme.
While Cawthorn isn’t named as a defendant in the class-action lawsuit, he is identified as one of the coin’s celebrity endorsers that helped Koutoulas inflate LGBCoin’s market value before the rug was pulled.
Yet Cawthorn continues to back the coin. More from The Examiner:
Despite the poor performance of the meme coin, Cawthorn has continued to tour the nation with Koutoulas, promote his ownership of the coin, and urge his followers to purchase the asset.
“I got Let’s Go Brandon coin,” Cawthorn said at the Conservative Political Action Conference, according to a video Koutoulas posted to his Instagram page in late February. “It’s working out well, very well.”
