On May 26, the Securities and Exchange Commission (SEC) charged a New York securities lawyer with fraud for using his office as the base for planning and implementing market manipulation schemes. The SEC also charged two Canadian promoters for assisting him.
According to the SEC, Adam Gottbetter coordinated promotional campaigns touting the prospects of microcap companies to entice investors to buy their stock at inflated prices so he and others could sell their stock at inflated prices. Gottbetter conspired with Mitchell Adam and K. David Stevenson for his last three schemes, during which time they cautioned each other to avoid drawing the attention of law enforcement to their schemes, even rehearsing their stories in the event of questioning by law enforcement.
Gottbetter agreed to pay $4.6 million to settle with the SEC, and Stevenson also agreed to settle. A case against Adam is pending in federal court. Charges against all three men have been filed by the U.S. Attorney’s Office for the District of New Jersey.
According to the SEC complaint, Gottbetter manipulated the stocks of Kentucky USA Energy Inc. and Dynastar Holdings Inc. before joining with Adam and Stevenson. He utilized their offshore ties to drive the stock price of a purported oil and gas exploration company through fraudulent trades generated by the trio’s trading algorithm. After creating the impression of liquidity and investor interest, he planned to sell stocks to unsuspecting investors.
As a result of their scheme, Gottbetter and Stevenson were banned from the penny stock industry and agreed to injunctions against future violations.
The attorneys at Dimond Kaplan & Rothstein, P.A. represent investors who have been defrauded in front of the SEC and all levels of state and federal court. If you have invested with Gottbetter or his colleagues, or if you have been the victim of investment fraud or stockbroker fraud, you may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.
