High Times, Elegance, Emerald Health Pharmaceuticals Among 8 Cannabis Co. Involved in Promotion Scheme, Says SEC - (HTHC)

On September 30, the Securities and Exchange Commission (SEC) announced that it had charged eight cannabis stocks, in a stock promotion scheme that included Emerald Health Pharmaceuticals, Elegance Brands Inc. (now Sway Energy Corp.), and High Times Holdings HTHC, reported Debra Borchardt for Green Market Report.

“The SEC says investors purchased $80 million of securities following the promotions. The individuals received payments based on the number of securities sold,” Borchardt wrote.

Undisclosed Compensations

The SEC announced that alleged recidivist securities law violator Jonathan William Mikula promoted the securities of four issuers Elegance Brands Inc., Emerald Health Pharmaceuticals Inc., Hightimes Holding Corp., and Cloudastructure Inc, “without disclosing that he received compensation for the promotions.”

Allegedly Mikula promoted the securities via a newsletter issued by the firm Palm Beach Venture, while he was secretly being compensated.

In addition to Mikula, the SEC’s complaint also charged Christian Fernandez and Amit Raj Beri, who allegedly acted as middlemen.

“Beri in particular acted as the middle man for the cannabis companies Emerald Health and HighTimes. High Times was not charged,” reported Borchardt.

Beri also was listed as the CEO and CFO of Elegance Brands, approved by the SEC for a Reg A offering.

Beri made changes to the offering but did not prepare a new offering statement with the SEC, and those securities are now considered unregistered.

“At Mikula’s urging, and in order to ‘facilitate’ the promotion, Elegance agreed to engage Individual 1, an associate of Mikula’s, and pay him 3% of investor funds raised through the promotion and provide him with 8.9 million shares of Elegance’s stock, which amounted to 10% of the company’s outstanding stock,” per the complaint.

According to the SEC, Elegance has agreed to pay a penalty of $776,932; Beri has agreed to pay disgorgement of $960,314.96, prejudgment interest of $38,979.24, a penalty of $207,183, entering a 10-year bar and “a conduct-based injunction prohibiting him from engaging in certain promotional activities.”

Stock Promotion Campaign

Meanwhile, Emerald Health allegedly made $30 million in the stock promotion campaign. Emerald Health’s CEO James DeMesa is accused of omissions in the filings on the promotion and related payments.

Emerald Health noted that Palm Beach Venture recommended the company “as an attractive investment opportunity” without disclosing that this was a paid-for recommendation.

Emerald Health has agreed to pay a penalty of $517,955; DeMesa has agreed to pay a penalty of $103,591 and agreed to a five-year bar from serving as an officer and director, and Dhillon has agreed to a permanent bar from acting as an officer and director.

High Times Holdings

High Times was promoted by Palm Beach Venture between April 2020 and March 2021.

“Hightimes ultimately entered into an agreement to pay Entity 1, a Canadian entity controlled by Individual 2, 5% of the funds raised through the Palm Beach promotion. (…) The purpose of using a Canadian entity and offshore account was to conceal that payments from Hightimes would go to Mikula,” per the complaint.

“High Times paid $150,000 for the promotion, but the complaint did not state the number of securities sold through the promotion. However, if High Times agreed to pay 5% of the securities sold and then paid the individual $150,000 it could be deduced that at least $3 million was raised through this promotion. High Times did not respond to a request for comment,” Borchardt wrote.

Image By Sang Hyun Cho On Pixabay



Image and article originally from www.benzinga.com. Read the original article here.