In response, U.S. Senator Thom Tillis (R-N.C.) wants the government to investigate Cawthorn for potentially violating the STOCK Act.
And he’s not alone.
Tillis’ tweet follows a report by the Washington Examiner that detailed how Cawthorn may have broken the law by allegedly engaging in a pump-and-dump cryptocurrency scheme.
The controversy emerged after Cawthorn posted pictures of himself at a party alongside James Koutoulas, a hedge fund manager behind the “Let’s Go Brandon” cryptocurrency, or LGBCoin.
“LGB legends. … Tomorrow we go to the moon,” Cawthorn posted on Instagram in response to a photo from the same event on Koutoulas’ account.
The following day, the stock did precisely that.
The Washington Examiner’s Andrew Kerr reports:
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.”
“I think there’s probably a strong case here,” Hedtler-Gaudette added. “I don’t want to prejudge, but based on everything that’s out there, I think there is a very strong possibility that if someone is going to investigate this, they’re going to find something.”
Kerr interviewed Craig Holman, a lobbyist with the consumer rights advocacy group Public Citizen. Holman said Cawthorn could face prison time if he purchased LGBCoin with nonpublic knowledge of Brown’s sponsorship deal before Dec. 30.
LGBCoin’s value rose to $570 million following Brown’s announcement. One month later, the digital coins were worthless.
Koutoulas blamed the stunning decline on two factors: NASCAR rejecting Brown’s deal with LGBCoin and unknown insiders who held a significant portion of LGBCoin shares dumping their stock for “substantial profit.”
A Missouri investor has since filed a class-action lawsuit against LGBCoin for allegedly engaging in a pump and dump scheme.
Although their suit doesn’t list Cawthorn as a defendant, it claims Koutoulas used the famous congressman’s endorsement to inflate LGBCoin’s stock price.
Koutoulas relaunched LGBCoin in February. LGBCoin’s website features the following disclaimer:
“Let’s Go Brandon has no intrinsic value, and you should not purchase it with any expectation that you will be able to resell it. Please do not spend money that you cannot afford.”
Whether or not an investigation by the Justice Department and Securities and Exchange Commission to determine if Cawthorn broke the law remains a matter of speculation.
In the meantime, Cawthorn hasn’t wasted any time responding to the “shenanigans,” as he recently called them.
In an Instagram video, the 26-year-old Member of Congress accused the Republican establishment “and the RINOs” of orchestrating a coordinated smear campaign against him. He said supporters should expect a steady stream of attack articles against him as North Carolina’s May 17 statewide primary nears.
Cawthorn added that he makes “no apologies” for what he does. Today, he continued his counteroffensive without addressing the charges directly.
Let us know what you think of Madison Cawthorn in the comments below and while you’re at it, tell us if you believe fellow Republicans are trying to derail his reelection campaign three weeks before his primary!