LOS ANGELES
Adam Levin, 45, founder and chairman ofHightimes Holding Corp., the publisher of High Times magazine, has agreed to plead guilty to a criminal conspiracy charge, officials stated.
Levin was accused of paying over $150,000 in undisclosed compensation to an investment newsletter analyst who promoted the company’s stock, helping Hightimes raise at least $6 million.
Levin, of Marina Del Rey, was charged last month with conspiracy to tout securities for undisclosed compensation.
On December 20, he filed a plea agreement admitting to the felony offense.
Levin is the fourth person charged in a scheme where companies paid an analyst at the investment newsletter Palm Beach Venture to promote their securities.
The analyst, Jonathan William Mikula, along with money launderer Christian Fernandez and broker Raj Beri, split the payments. All three pleaded guilty last year and face sentencing in July.
Executives like Levin made payments in exchange for promotional articles on 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.