According to the SEC complaint, Gottbetter was involved in manipulating the stocks of Kentucky USA Energy Inc. and Dynastar Holdings Inc. before enlisting Adam and Stevenson’s offshore ties in a more lucrative scheme.
Together, the trio planned to drive up the stock price for purported oil and gas exploration company HBP Energy Corp. through fraudulent trades generated by a trading algorithm, according to the SEC. They then allegedly planned to launch a promotional campaign featuring multiple call centers, roadshows and a listing on the Frankfurt Stock Exchange.
During this time, the SEC claims that Gottbetter, Adam and Stevenson cautioned each other about the dangers of missteps that could have drawn law enforcement attention to the scheme, and rehearsed stories they would tell if ever questioned by law enforcement. During one New York meeting, Gottbetter allegedly complained about the difficulties of stock manipulation, conceding that robbing a bank was the only other way to make money so quickly.
After the trio created a false appearance of liquidity, the SEC alleges that they planned to dump their shares of the stock, but the scheme was thwarted before it could be launched when Stevenson was arrested by the FBI.
The SEC’s complaint alleges that Gottbetter violated Sections 5(a), 5(c) and Section 17(a) of the Securities Act of 1933, and violated and aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The complaint alleges that Adam and Stevenson violated and aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.