Pump and Dump Promoter Jailed
Stock Promoter Mitchell Adam, 47, of Vancouver, Canada pled guilty this week in a New Jersey court for his part in a scheme to artificially inflate the price of a purported oil company listed on the pink sheets, HPB Energy Corporation. He now faces five years in federal prison. Mr. Adam pled guilty to conspiracy to commit securities fraud and mail fraud.
During a four month time frame in 2013, Prosecutors say that Adam conspired with attorney Adam Gottbetter and fellow promoter Kenneth Stevenson to drive up the price of HPBE by using matched trades, spam and offshore call centers. Traders that Gottbetter knew would carry out most of the market legwork, while Adam and Stevenson would carry out the pump side of the scheme through promotions. Law enforcement intervened before the promotions could take place.
The coconspirators did, however, obtain and conceal control of a significant portion of free-trading shares of the company’s stock and allegedly planned to sell it at the fraudulently inflated prices.
Gottbetter pled guilty in September to conspiracy to commit securities and mail fraud as managing partner of Gottbetter & Partners LLC. He was sentenced to 18 months in May. For his part, Stevenson was sentenced to one year probation, also in May.
Adam was initially charged in the incident and arrested at the George Bush Intercontinental Airport in Houston in May. Since then he has been held in a high security prison.
The conspiracy count that Mr. Adam pled guilty to carries a maximum of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.
Sentencing is scheduled to take place on October 27, 2015.