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by Mike Caswell

The U.S. Securities and Exchange Commission has fined and banned Ontario lawyer Sergio Damian Lopez for his part in schemes to conceal the paid promotions of two U.S. listings. The SEC claims that Mr. Lopez helped others -- including Adam Levin, the since-arrested California man connected to High Times magazine -- through sham consulting agreements designed to disguise money funnelled to paid promoters. One of the companies raised $30-million amidst the scheme, the SEC says. (All figures are in U.S. dollars.)

The penalties are contained in a judgment that the SEC released on Friday, June 13. The judgment permanently bars Mr. Lopez, 42, from promoting stocks or earning money from a promotion. He is also barred form serving as an officer or director for three years. On top of that, Mr. Lopez must pay $323,335 in fines and disgorgement. The penalties represent a negotiated settlement, in which Mr. Lopez has not admitted any wrongdoing.

While the penalties for Mr. Lopez are entirely civil in nature (meaning he has no criminal record), Mr. Levin faces the possibility of prison. He pleaded guilty to a criminal charge arising from promotion of Hightimes Holdings Corp., one of the companies in the scheme. Prosecutors claimed that Mr. Levin and others raised $6-million while secretly running a paid promotion. He awaits sentencing.

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