Tezos Co-Founder Sanctioned by U.S. Watchdog FINRA
Tezos co-founder and chief technical officer Arthur Breitman has been sanctioned by FINRA — the private, self-regulatory Financial Industry Regulatory Authority — for failing to disclose his outside work, e.g. Tezos, while he was employed at Morgan Stanley between 2014 and 2015.
FINRA Cracks Down on Breitman
Tezos mainstay Arthur Breitman has been slapped with a $20,000 USD fine and blocked from “associating with broker-dealers for two years” by FINRA, per Reuters. The penalties come in response to Breitman allegedly failing to properly disclose his work outside Morgan Stanley starting in 2014.
FINRA mandates securities professionals disclose to their employers — Morgan Stanley in Breitman’s case — if they’re involved in supplementary work that entails, or most likely will entail, compensation. At press time, Breitman has neither denied or fessed up to the charge.
As FINRA noted in its official statement on the sanctions:
“Breitman did not notify Morgan Stanley at any time that he was engaging in these outside business activities.”
‘Business Plan’ Causes the Set Back
The so-called “Tezos Business Plan” seems to be the root of Breitman’s current sanctions.
Notably, last summer Kathleen Breitman — Arthur’s wife — commented to the press that her husband had been entirely forthright in his professional dealings:
“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.”
The problem? A copy of a 2015 document entitled the “Tezos Business Plan” has been uncovered, wherein Breitman was listed as CEO of the play and suggested the firm could one day be worth as much as $20 billion dollars.
That reality ran afoul of FINRA’s regulations. Moreover, the private regulatory agency also found Breitman guilty of using a pseudonym — L. M. Goodman, “author” of the 2014 Tezos white paper — to obscure his activities around the crypto project during his time at Morgan Stanley.
Breitman’s Attorney: Incident Has No Implications for Tezos
Arthur Breitman’s attorney, Sarah Lightdale, is adamant that FINRA’s sanctions won’t adversely affect the Tezos project:
“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.”
And, for the developers of the project, that claim is entirely true. It’s business as usual no matter what happens, as Tezos apps engineer Martin Pospěch indicated to me back in February 2018.
What’s your take on Tezos? Are you excited or skeptical about the project? Sound off in the comments below.
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