NEWARK, N.J. - A Canadian stock promoter has admitted taking part in a scheme to artificially inflate the stock price of a publicly traded company through manipulative trading and other fraudulent means.
Federal prosecutors in New Jersey say 47-year-old Mitchell Adam, of Vancouver, pleaded guilty to conspiracy to commit securities and mail fraud. He now faces five years in prison when he's sentenced Oct. 27.
Prosecutors say that during a four-month period in 2013, Adam conspired with others to manipulate the stock of a Houston-based company. They obtained and concealed control of a significant portion of free-trading shares of the company's stock and agreed to fraudulently inflate the price and trading volume of the stocks through various means.
They allegedly planned to sell the stocks at the fraudulently inflated prices.
New York lawyer Adam S. Gottbetter (pictured) pleaded guilty in September to conspiracy to commit securities and mail fraud as managing partner of Gottbetter & Partners LLC.
Gottbetter admitted he'd manipulated the price and trading volume of Dynastar Holdings Inc. (
OTO:DYNA,
Forum) and Lido International (
GREY:LIDO,
Forum), and alleged Adam and another Vancouver man, Ken Stevenson, were also involved.
Adam has been held in a high security prison in the US since his arrest, and had initially planned to fight the charges, suggesting he was a minor player in the scheme.
Gottbetter agreed to pay $4.6 million to settle the civil claims related to the case.
-- With file by Chris Parry, Stockhouse