Source: Federal Bureau of Investigation (FBI) State Crime News
LOS ANGELES – The founder and chairman of Hightimes Holding Corp., the company that publishes High Times magazine, has agreed to plead guilty to joining a criminal conspiracy to pay more than $150,000 in undisclosed compensation to an analyst for an investment newsletter that touted its stock and assisted Hightimes in raising at least $6 million.
Adam Levin, 45, of Marina Del Rey, was charged last month with one count of conspiracy to tout securities for undisclosed compensation. In a plea agreement filed December 20, Levin agreed to plead guilty to that felony offense.
Levin is scheduled to appear January 14 in United States District Court to make his initial appearance in this case.
Levin is the fourth defendant to be charged in this scheme in which companies paid the analyst at “Palm Beach Venture,” an investment newsletter with subscribers nationwide. That analyst, Jonathan William Mikula – along with his associate, Christian Fernandez, who acted as a money launderer for the scheme; and Raj Beri, the CEO of a Beverly Hills company who brokered deals for undisclosed payments by other issuers, each received a portion of the payments. Mikula, Fernandez and Beri each pleaded guilty last year and are scheduled to be sentenced in July.
The payments made by executives such as Levin were in exchange for Palm Beach Venture publishing promotional pieces for securities offerings, according to court documents.
Federal law requires full and public disclosure from anyone who has received payment – directly or indirectly – from an issuer for publishing, publicizing or circulating any advertisement or communication that describes the issuer’s security offered for sale.
According to Levin’s plea agreement, in 2020 and 2021, “Hightimes raised approximately $20 million from more than 10 investor-victims, with at least $6 million in investment proceeds associated with Palm Beach Venture’s promotion.”
In exchange for the favorable articles in the newsletter, Levin admitted he paid $150,000 via wire transfers, as well as tens of thousands of dollars for entertainment expenses.
To conceal the scheme, Levin entered into a sham “marketing agreement” and routed the payments through a Canadian bank to a shell company in Canada, according to the plea agreement.
Mikula then caused Palm Beach Venture to promote Hightimes’ securities offering on April 6 and September 23 in 2020 in articles that falsely stated, “Neither the Palm Beach Research Group nor its affiliates receive compensation for bringing this deal to you,” the plea agreement states.
Levin also admitted that he lied to the United States Securities and Exchange Commission when he denied knowing that he entered into a “pay-for-play arrangement.”
The FBI is investigating this matter.
The SEC filed a civil action against Hightimes that was resolved in 2023 with Hightimes agreeing to a cease-and-desist order and paying a penalty of $558,071.
Any investors who believe they are a victim of the crimes in this scheme are encouraged to go to https://www.justice.gov/usao-cdca/united-states-v-jonathan-william-mikula-christian-fernandez-and-amit-raj-beri for further information and updates regarding this matter.
Assistant United States Attorney Adam P. Schleifer of the Corporate and Securities Fraud Strike Force is prosecuting this case.