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SEC Charges Eight In Cannabis Stock Promotion Scheme

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Elegance Brands, Emerald Health Pharmaceutical, and High Times are the stocks included in the stock promotion scheme.

he SEC’s announcement attached the legal complaint that alleged recidivist securities law violator Jonathan William Mikula promoted the securities of four issuers Elegance Brands Inc. (now Sway Energy Corp.), Emerald Health Pharmaceuticals Inc., Hightimes Holding Corp., and Cloudastructure Inc. without disclosing that he received compensation for the promotions. Mikula is alleged to have promoted the securities through Palm Beach Venture, a newsletter for which he served as an author and chief analyst, and presented the recommendations as unbiased and not paid for, while he was secretly compensated in the form of cash and lavish expenses.

In addition to Mikula, the SEC’s complaint also charged Christian Fernandez and Amit Raj Beri, associates of Mikula’s, who allegedly acted as middlemen for the promotional scheme. The gentlemen earned millions of dollars off the promotions but hid the payments by submitting fake invoices for consulting services. Beri in particular acted as the middle man for the cannabis companies Emerald Health and HighTimes. High Times was not charged.

Elegance Brands

Beri also was listed as the CEO and CFO in various SEC filings of the company called Elegance Brands, which produced a product called Gorilla Hemp. Elegance was approved by the SEC for a Reg A offering but after nine months had raised less than a million dollars. When it was decided to promote Elegance through the Palm Beach Ventures newsletter, Beri made changes to the offering but did not prepare a new offering statement with the SEC. Thus any securities sold after that point were considered unregistered. The complaint stated, “At Mikula’s urging, and in order to “facilitate” the promotion, Elegance agreed to engage Individual 1, an associate of Mikula’s, and pay him 3% of investor funds raised through the promotion and provide him with 8.9 million shares of Elegance’s stock, which amounted to 10% of the company’s outstanding stock.”

The complaint said that the newsletter published an article stating that Gorilla Hemp was retailing for $3.95 a can; that Gorilla Hemp could yield Elegance a 2,630% price increase; that Elegance had distribution agreements in place for Gorilla Hemp with the largest adult beverage distributor in the United States; and that Elegance’s share price was projected to increase by 9,900% in five years.

The complaint stated that Elegance raised $20 million from the promotion and paid Individual 1 $350,000.  The SEC statement said that Elegance has agreed to pay a penalty of $776,932; Beri has agreed to pay disgorgement of $960,314.96, prejudgment interest of $38,979.24, a penalty of $207,183, has consented to the entry of a 10-year bar and a conduct-based injunction prohibiting him from engaging in certain promotional activities.

In January 2022, Elegance renamed itself Sway Energy Corp. and earlier this year signed a distribution agreement with Halo Collective (OTC: HCANF) as part of its acquisition of H2C Beverages.

Emerald Health

Emerald Health allegedly made $30 million in the stock promotion campaign that consisted of promotional articles in the newsletter. Emerald Health’s CEO James DeMesa is accused of participating in the scheme and allegedly made material misrepresentations and omissions in the filings with the SEC and other investor materials concerning the promotion and related payments. According to the complaint, Emerald Health’s co-founder, Avtar Dhillon, played a key role in the scheme to promote Emerald Health. A separate administrative proceeding against Emerald Health’s CFO, Lisa Sanford, finds that she negligently participated in the scheme.

In 2019, Emerald Health reached out to Mikula for a story in the newsletter. The complaint wrote that Emerald Health would covertly transfer funds to Mikula by engaging Beri’s brother to ostensibly provide consulting services for the company. In turn, Beri’s brother would funnel a portion of his consulting fees to Mikula, and keep a portion for brokering the fraudulent deal. The complaint noted that DeMesa had reservations about the scheme but ultimately wanted the funds to aid in running the company.

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In February and March 2020, Mikula authored a Palm Beach Venture article titled “Curing Incurable Diseases and Giving Us Over 4,900% Potential Gains,” which touted Emerald Health and was distributed to the newsletter’s subscribers. In a quarterly update to its investors, Emerald Health highlighted that Palm Beach Venture recommended the company “as an attractive investment opportunity” without disclosing that this was a paid-for recommendation. In late summer 2020, Mikula authored another Palm Beach Venture article touting Emerald Health entitled “The Next Aspirin.”

The SEC statement said that Emerald Health has agreed to pay a penalty of $517,955; DeMesa has agreed to pay a penalty of $103,591 and agreed to a five-year bar from serving as an officer and director, and Dhillon has agreed to a permanent bar from acting as an officer and director.

High Times

High Times was promoted by Palm Beach Venture between April 2020 and March 2021. The complaint stated, “Hightimes ultimately entered into an agreement to pay Entity 1, a Canadian entity controlled by Individual 2, 5% of the funds raised through the Palm Beach promotion. Beri, Individual 2, Fernandez, and Mikula agreed that they would all receive a share of monies that Entity 1 received from Hightimes. The purpose of using a Canadian entity and offshore account was to conceal that payments from Hightimes would go to Mikula.” (Hightimes — using the combined words — is the legal name for the company. However, most refer to the company as High Times).

High Times paid $150,000 for the promotion, but the complaint did not state the number of securities sold through the promotion. However, if High Times agreed to pay 5% of the securities sold and then paid the individual $150,000 it could be deduced that at least $3 million was raised through this promotion.  High Times did not respond to a request for comment.

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Photo by Olena Ruban/Getty Images

On Friday, High Times filed a report with the SEC stating that its independent auditor, RBMS LLP on July 18, 2022, declined to stand for re-appointment other than to complete the audit of the 2019 financial statements and the filing of the company’s Annual Report on Form 1-K for the year ended December 31, 2019. High Times did say that RBMS classified the company as a going concern for the years 2015-2019. High Times also stated that it has hired GreenGrowth to audit its statements from 2020 to 2021. It made no mention of the stock promotion scheme that had been announced on the same day.

The company has also extended its Reg A offering to January 2023. The offering however is paused until the company can file audited and updated financials.

The offering was stopped in June 2020, but it was July 2020 when the Cannabis Law report confirmed from HighTimes Holding Corp. lawyer  Stephen Weiss and Megan Penick of L.A. based Michelman Robinson LLP that the Securities & Exchange Commission (SEC) has halted sales of shares in the company. Lawyer Megan Penick told Cannabis Law Report she wasn’t aware the company was continuing to solicit for investments even though the website to do so remained live.

In addition to that, press releases for the company continually remind readers that the offering deadline was extended and email inboxes for subscribers were flooded with almost daily offers to buy stock. The main issue according to Buhl wasn’t the company’s promotional activity, but whether the company’s escrow agent Prime Trust processed any sales after the June 12 cutoff. If no sales were processed after June 12, then there was no securities violation. Yet, the SEC says in its complaint that the Palm Beach Ventures promotion went as late as March 2021.

Source: https://thefreshtoast.com/news/sec-charges-eight-in-cannabis-stock-promotion-scheme/

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Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light

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Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).

The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.

India’s Indigenous LEO Satellite Vision

Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.

The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.

According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.

The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.

Regulatory Process Moves Forward

Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.

The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.

Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.

Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.

Broadband, Mobile Connectivity, and Strategic Applications

Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.

The company also intends to establish 20 to 22 ground stations across India to support network operations.

Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.

Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.

Major Step for India’s Space and Telecom Sectors

Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.

The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.

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Alleged Crores Pharma Scam Mastermind Arrested from Surat

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After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.

Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.

Fake Business Deals and Dishonoured Cheques Used in Fraud

Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.

In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”

Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.

Multiple Identities and Repeated Fraud Pattern

Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.

Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.

Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.

Multi-State Surveillance Leads to Arrest in Surat

A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.

Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.

Growing Threat of Corporate Identity Fraud

The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.

Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.

Experts Urge Stronger Due Diligence in High-Value Transactions

Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.

Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.

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EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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