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Litigation Release No. 25857 / September 27, 2023
The Securities and Exchange Commission today announced charges against Hightimes Holding Corp. Executive Chairman Adam Levin and Cloudastructure, Inc. Chief Executive Officer Rick Bentley for their involvement in separate fraudulent schemes to promote securities offerings that Hightimes and Cloudastructure were conducting pursuant to Regulation A, which, if certain conditions are met, provides an exemption to the Securities Act's registration provisions. Levin and Bentley have agreed to settle the SEC charges.
According to the SEC's complaints, Levin and Bentley participated in the fraudulent promotions of their companies' securities by concealing payments to Jonathan William Mikula through middlemen acting on his behalf, and lavishly entertaining Mikula, in exchange for promotion by Mikula through Palm Beach Venture, a newsletter for which he served as an author and chief analyst. The complaint against Levin alleges that he participated in the fraudulent promotion of Hightimes' securities between at least April 2020 and August 2021. A separate complaint against Bentley alleges that he participated in the fraudulent promotion of Cloudastructure's securities between at least September 2020 and mid-2021. The charging documents further allege that Levin and Bentley made material misrepresentations and omissions to investors in connection with their offerings. According to the complaint filed against Levin, he also engaged in an offering of Hightimes' securities that was unregistered and not covered by a valid registration exemption between June 2020 and December 2022.