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LOS ANGELES (CNS) - 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 the company in raising at least $6 million, officials said Friday.
Adam Levin, 45, of Marina del Rey was charged last month with one federal count of conspiracy to tout securities for undisclosed compensation. In a plea agreement filed Dec. 20, Levin agreed to plead guilty to the felony offense, according to the U.S. Attorney's Office.
Levin is scheduled to make his initial appearance in the case Tuesday in Los Angeles federal court.
He is the fourth defendant to be charged in the 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.
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 Sept. 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 U.S. Securities and Exchange Commission when he denied knowing that he entered into a "pay-for-play arrangement," court papers show.