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Texas orders Whiskey & Wealth Club ‘cease and desist’

The Texas State Securities Board has issued an emergency cease and desist order to Whiskey & Wealth Club.

Whiskey & Wealth Club
Whiskey & Wealth Club has been ordered to cease and desist in Texas, US

Whiskey & Wealth Club claims to be a specialised cask whiskey wholesaler.

The cease and desist order cites several members of staff at Whiskey & Wealth Club: Scott Sciberras, a co-founder, director, chief executive officer; William Fielding, co-founder, director and chief operations officer; Alex Mook, a manager; Richard Falconer, an advisor; and Benjamin Dunlop, a senior manager.

The order outlines the investment opportunity presented by Whiskey & Wealth Club. It said the company is raising capital from investors to purchase whisky from Bladnoch Distillery (in Scotland) at discounted, wholesale auction rates.

Investors pay £126,000 for 10 pallets or £63,000 for five pallets, with each pallet consisting of six casks, with each cask containing 200l of whiskey. Whiskey & Wealth Club registers title and ownership in the name of the investor.

It continues to claim that Sciberras, Fielding and Dunlop are telling potential investors they must provide identifying and contact information and a deposit of £2,000 that serves as down payment for the investment. It also alleges that they are telling potential investors they must provide this information and the deposit before Whiskey & Wealth Club can provide a contract for the sale of the investment.

The order also outlines Whiskey & Wealth Club’s performance during the pandemic, with claims such as selling 111.2 pallets of whisky for £1,803,627 in September 2020, an increase of almost 54% compared with August that same year.

The Texas State Securities Board alleges the investments tied to pallets of whisky have not been registered by qualification, notification or coordination, and no permit has been granted for their sale in Texas.

The Texas State Securities Board claimed in the cease and desist instructions that Sciberras, Fielding, Mook, Falconer and Dunlop are ‘intentionally failing to disclose the business repute, experience and qualifications of respondent Sciberras, and this information constitutes a material fact’.

In connection with the offer of investments tied to pallets of whiskey, the respondents are ‘intentionally failing’ to disclose material facts about the Bladnoch Distillery. This includes, according to the Texas State Securities Board, the business repute, qualifications and experience of the Bladnoch Distillery, and the quality, marketability and profitability of whiskey produced by Bladnoch Distillery.

Emergency cease and desist

In conclusion, the order said: “Respondents are engaging in fraud in connection with the offer for sale of securities.

“Respondents are making offers containing statements that are materially misleading or otherwise likely to deceive the public.

“Respondents’ conduct, acts, and practices threaten immediate and irreparable public harm.

“The foregoing violations constitute bases for the issuance of an emergency cease and desist order pursuant to Section 23-2 of the Securities Act.”

The order instructs Whiskey & Wealth Club to ‘immediately’ cease and desist from offering any sale in Texas until the security is registered with the securities commissioner or is offered for sale in accordance with an exemption from registration under the Texas Securities Act.

The cease and desist order was signed by Travis J Iles, securities commissioner.

Statement from Whiskey & Wealth Club

In response to a request for comment from The Spirits Business, Whiskey & Wealth Club said: “Whiskey & Wealth Club UK Limited confirms that it has received a cease and desist from the Texas State Security Board (TSSB) on the basis that we are operating as a security, requiring SEC regulation.

“We do not offer securities and furthermore, we do not offer and are not involved in fractional selling.

“We sell wholesale cask whiskey to customers, whereby they purchase, in full, the entire asset.

“The buying and selling of whiskey and the whiskey industry, as a whole, is highly regulated in the UK under HMRC. Whiskey and Wealth Club is fully compliant and holds all required licensing to operate within this jurisdiction.

“We are working closely with the TSSB to educate them on the process of cask whiskey buying and selling and on how our business model works. We will be making no further comment until this matter has been resolved.”

Bladnoch Distillery has also been approached for comment.

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