SEC target Adam sentenced for HBP pump-and-dump planSEC target Adam sentenced for HBP pump-and-dump plan 2015-09-17 12:29 ET - Street Wire Also Street Wire (U-*SEC) U S Securities and Exchange Commission Also Street Wire (U-HBPE) HBP Energy Corp by Mike Caswell A New Jersey judge has sentenced Vancouver's Mitchell Adam to one year of supervised release, with no jail term, for planning the manipulation of pink sheets listing HBP Energy Corp. Mr. Adam, 47, received the sentence in a 30-minute appearance on Monday, Sept. 14, before Judge Jose Linares. In addition to the supervised release, the judge ordered Mr. Adam to refrain from the use of drugs and alcohol and to undergo mental health treatment. The circumstances of Mr. Adam's sentence are far from clear. In a motion filed on Sept. 3, 2015, he sought a downward departure from whatever punishment the judge may have contemplated. (The maximum jail term was five years.) The motion is sealed, however, so the basis for his request is unknown. Mitchell Adam LINKED IN Mitchell Adam For Mr. Adam, the sentencing concludes a trip through the U.S. legal system that began with his arrest on May 28, 2015, at the George Bush Intercontinental Airport in Texas. U.S. authorities charged him for the manipulation of HBP Energy, a purported oil company. According to prosecutors in New Jersey, he and others planned to boost the stock with wash trades, cold-calling and spam. The plan ultimately amounted to nothing, as one of the traders who was to participate was co-operating with authorities. After his arrest in Texas, Mr. Adam was transported to New Jersey, where a judge eventually released him a $250,000 appearance bond. (All figures are in U.S. dollars.) The terms of his release included surrendering his passport and living with his mother in Florida. He did not go on trial, as he pleaded guilty to the charges on July 14, 2015. Mr. Adam's sentence is the lightest to arise from the scheme, although not by much. One of his co-accused, Vancouver's Kenneth Stevenson, received one year of supervised release and a $10,000 fine. The only defendant to go to jail was New York shell lawyer Adam Gottbetter, who is serving an 18-month term. Prosecutors claimed that he manipulated HBP and two other companies, with one of those other pump-and-dumps generating $12-million in gains. Details of the case against the men are contained in a parallel civil complaint the U.S. Securities and Exchange Commission filed on May 26, 2015. The scheme, as described by the SEC, came about in July, 2013, when Mr. Adam and Mr. Stevenson met the man that the SEC called the architect of the manipulation, Mr. Gottbetter. He had run prior manipulations, including the pump-and-dump of a company called Kentucky USA Energy Inc. Unfortunately for the two Vancouverites, Mr. Gottbetter had been under the watch of law enforcement for at least a year by the time that they met him. He was working with a trader who had been secretly co-operating with authorities. After meeting the Vancouver pair, Mr. Gottbetter told the trader that he had been approached by a "big hitter" and that the "big hitter" was looking for someone to "run the market." Mr. Gottbetter then invited the trader to join the scheme. This invitation led to a meeting between the trader, Mr. Adam and Mr. Stevenson at a New York hotel. At the meeting, the trader explained to the Vancouver pair that he would use 32 accounts held by foreign nominees to "walk up" HBP Energy. Around the same time Mr. Adam and Mr. Stevenson would carry out a European road show and Mr. Stevenson would "bring in buying" of $1-million or more to keep the stock rising. The men would then sell shares of the company and divide the proceeds. The trader, however, was gathering evidence that could later be used against the men. Agents were able to corral what prosecutors described as a substantial amount of material. This included recordings of phone calls and meetings as well as e-mails, trading records and bank records. U.S. authorities arrested Mr. Stevenson long before Mr. Adam, taking him into custody on Dec. 9, 2013. A judge released him on a $500,000 bond. The government kept the action secret, obtaining a seal on the file until after Mr. Adam's arrest. There was never any trial, as Mr. Adam, Mr. Stevenson and Mr. Gottbetter all pleaded guilty. In addition to the criminal sanctions, Mr. Adam and Mr. Stevenson both received a permanent penny stock ban from the SEC. Still awaiting sentencing are two Canadians charged in a connected case, Mike Taxon and Itamar Cohen, both of Toronto. Prosecutors in New Jersey claim that they participated in a $17-million scheme to manipulate Kentucky USA Energy and another listing, Raven Gold Corp. The pair worked as paid promoters for Mr. Gottbetter and others, helping boost Raven to $1.73 and Kentucky to $3.97. They pleaded guilty to the charges when they were filed, and are scheduled to be sentenced on Jan. 12, 2016. Prior to the charges, Mr. Adam had held roles with dozens of TSX Venture Exchange companies. These included a period as president of Bonterra Resources Inc. and as president of Weststar Resources Corp. He was also the president of Oxford Resources Inc. until his arrest. 2015 Canjex Publishing Ltd. All rights reserved.