Hightimes Holding Corp. has 30 days to pay the fine.
Hightimes Holding Corp. has settled allegations of an illegal stock promotion “scheme” with the U.S. Securities and Exchange Commission for a fine of $558,071, and the company has a month to pay up, according to SEC records.
The company faced allegations of stock promotion in connection with a civil securities fraud case the SEC filed against High Times CEO Adam Levin. Documents for that case outlined how Levin and High Times paid William Mikula to promote the company in a supposedly independent newsletter issued by Palm Beach Ventures.
In a new order, the SEC alleged that for roughly two years – from early 2020 to 2021 – Hightimes Holding Corp. “engaged in a scheme to deceive investors by paying undisclosed compensation” to Mikula and Palm Beach Ventures, and that “investors were given misleading information” through a “sham consulting agreement” that Levin had with Mikula.
The “scheme” allegedly began in April 2020, when Levin entered into a consulting agreement with a business that was actually a front for Mikula, according to the settlement, and agreed to pay him up to $3 million in cash and stock from however much was raised from a Reg-A offering.
Mikula ultimately was paid only $150,000 between April and June 2020, but Levin spent another $100,000 on “lavish entertainment expenses such as meals and bottle service at clubs, yacht rentals to host Mikula, the engagement of entertainers,” and more, according to the settlement.
After the Reg-A offering was closed, the SEC alleges that Hightimes illegally continued selling another $13 million in Reg-A securities until December 2022, which the agency said constitutes fraud.
Mikula has also been charged separately by the SEC, the commission noted, in connection with other illegal stock promotion schemes.
The $558,071 fine from Hightimes Holding Corp. is due to the SEC within 30 days of Sept. 27. If payment isn’t received by then, interest will begin to accrue.
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