Whiskey & Wealth Club welcomes end of Texas dispute

The Texas State Securities Board has dismissed its cease-and-desist order against cask wholesaler Whiskey & Wealth Club.

The US securities board issued the emergency order on 2 November, claiming the London and Dublin-based cask wholesaler was engaging in fraud by offering securities and making statements to deceive the public.

The cease-and-desist order cited several members of staff at Whiskey & Wealth Club: Scott Sciberras, a co-founder, director, and 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 US securities board alleged the investments tied to pallets of whiskey had not been registered by qualification, notification or coordination, and no permit had been granted for their sale in Texas.

The demand was contested by the Whiskey & Wealth Club, and after submitting sufficient information, the Texas agency agreed to dismiss the order on 7 July.

The new order states that Whiskey & Wealth Club cooperated with the Enforcement Division by providing relevant records and information about its business.

As part of the order, Whiskey & Wealth Club also agreed to review its marketing materials and purchase contracts.

The US board also dismissed the allegations against the individuals named in the cease-and-desist order.

Jay Bradley, co-founder of Whiskey & Wealth Club, said: “This is a hugely important victory for Whiskey & Wealth Club in a case that has been hanging over our business for eight months and which cost a significant amount of money in legal fees, drained resources, and defamed our company, yet now paves the way for our cask wholesale business to prosper in the United States and around the world.

“The Securities Board has now rectified its mistake and recognised our substantial co-operation with the investigation. The retraction and dismissal of the case is the closest thing to an apology that we are going to get.”

‘Disastrous impact’

Sciberras said the policies and procedures used by the state board “could have significant financial and reputational ramifications for any businesses”.

He added: “We believe the US practice of issuing a damaging press release on the same day as a legal order, without seeing or hearing any evidence, even going as far as to accuse a company of fraud ­­– and then retracting all of those allegations eight months later, could have a disastrous impact on most businesses. This kind of legal and public relations strategy is unheard of in Ireland, the UK, or Commonwealth countries.

“We have worked closely with the Securities Board to educate them on the process of wholesale cask whiskey buying and selling, and on how our business model works, and we will continue to work with them in the future.”