SEC v. Sergio Damian Lopez, No. 2:25-cv-04795-CAS, Central District of California (June 13, 2025) — Complaint

 
 
 
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CHARLES E. CANTER (Cal. Bar No. 263197) 
Email:  [email protected] 
SARAH S. NILSON (Cal. Bar No. 254574) 
Email:  [email protected] 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Brent W. Wilner, Associate Director 
Douglas M. Miller, Supervisory Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 
UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA 
 
SECURITIES AND EXCHANGE 
COMMISSION, 
Plaintiff, 
 
vs. 
SERGIO DAMIAN LOPEZ, 
Defendant. 
 
 Case No. 
 
 
COMPLAINT 
 
 
 
 

 
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Plaintiff Securities and Exchange Commission (“SEC”   or “Commission”) files 
this complaint against Defendant Sergio Damian Lopez (“Lopez”) and alleges: 
JURISDICTION 
1. The Court has jurisdiction over this action under Sections 20(b), 
20(d)(1),  and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. 
§§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e),  and 27(a) of 
the Securities Exchange Act of 1934 (“Exchange Act”),  15 U.S.C. §§ 78u(d)(1), 
78u(d)(3)(A), 78u(e) & 78aa(a). 
2. Defendant has, directly or indirectly, made use of the means or 
instrumentalities of interstate commerce, of the mails, or of the facilities of a national 
securities exchange in connection with the transactions, acts, practices,  and courses of 
business alleged in this complaint.  
3. Venue is proper in this district under Section 22(a) of the Securities Act, 
15 U.S.C. § 77v(a) and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), 
because some of the transactions, acts, practices,  and courses of conduct constituting 
violations of the federal securities laws occurred within this district. 
SUMMARY 
4. This securities fraud enforcement action involves a scheme to conceal 
paid promotion of two securities offerings   under Regulation A. 
5. Lopez’s associate, William Mikula, authored articles promoting the 
securities offerings of Hightimes Holding Corp. (“Hightimes”) and Cloudastructure, 
Inc. These articles, as Lopez knew, falsely represented to would-be investors that 
neither the newsletter publishing the articles nor the authors received any 
compensation for their recommendation. In fact, Hightimes paid $150,000 in cash—
through Lopez’s Canadian entity 2749960 Ontario Ltd.—under a sham “consulting 
agreement” that Lopez had drafted and signed.  Through a separate “consulting 
agreement” that Lopez drafted and signed, Cloudastructure paid $650,000 to 
Bluerock Consulting Inc.—another entity Lopez had created. Lopez, in turn, funneled 

 
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a portion of these funds to Mikula through Mikula’s own offshore entities, 
themselves created to further conceal that the issuers were secretly paying for 
Mikula’s promotional articles. These actions gave Hightimes and Cloudastructure 
investors the misleading impression that the recommendations were objective and 
independently formed, when really they were paid-for promotions.  
6. Lopez retained about $200,000 for himself. 
7. Through his conduct, Lopez violated the antifraud provisions of 
Section 10(b) of the Exchange Act and Rules  10b-5 (a) and 10b-5(c) thereunder, 
15 U.S.C. § 78j(b) and 17 C.F.R. §§ 240.10b-5(a), (c), the antifraud provisions of 
Sections  17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. §§   77q(a)(1), 
77q(a)(3), and aided and abetted Mikula’s violations of the anti-touting provisions of 
Section 17(b) of the Securities Act.   
8. The SEC seeks permanent injunctions against future violations of 
Exchange Act Section 10(b) and Rules   10b-5 (a) and 10b-5(c) thereunder and 
Securities Act Sections 17(a)(1), 17(a)(3), and 17(b),  a conduct-based injunction, a 
civil penalty,   disgorgement with prejudgment interest, and an order barring Lopez 
from serving as an officer or director of a public company.   
THE DEFENDANT 
9. Lopez, age 42, is a Canadian securities lawyer. Since 2015, he has 
served as an officer or director of multiple companies that trade on Canadian stock 
exchanges, eight of which were quoted and traded over the counter in the United 
States. Between 2020 and 2021, he also served as an executive of an entity listed on a 
national securities exchange in the United States.  
RELATED INDIVIDUALS AND ENTITIES 
10. Mikula is a resident of Georgia, who, from at least 2019 through late 
2021, was chief analyst and author of Palm Beach Venture, a newsletter published by 
Palm Beach Research Group. Mikula is a member and part owner of New Age 
Vending LLC (“New Age Vending”), which received a portion of the funds used to 

 
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compensate Mikula for the Hightimes promotion. Mikula also used a Mexican entity, 
Goldentown Consulting SA de CV (“Goldentown”), as a nominee through which he 
received compensation in exchange for the Cloudastructure promotion. Federal 
courts, including this Court, have repeatedly enjoined Mikula from violating the 
federal securities laws, most recently in connection with conduct related to the 
promotion of Hightimes and Cloudastructure. SEC v. Mikula, Case No. 2:22-cv-
07096-SB-E (C.D. Cal. filed Sept. 30, 2022). See also SEC v. Phoenixsurf.com, et al., 
Case No. 2:07-cv-04765-JSL, ECF No. 6 (C.D. Cal. Aug. 14, 2007); SEC v. Mikula, 
Case No. 1:08-cv-03097-BBM, ECF No. 95 (N.D. Ga. Sept. 24, 2009).  
11. Christian Fernandez is a Mexican citizen residing in the State of 
Georgia. Fernandez acted as a middleman in connection with Mikula’s promotions of 
certain securities offerings, including those of Hightimes and Cloudastructure. 
Fernandez is a defendant in the SEC’s 2022 action in this Court against Mikula. 
12. Amit Raj Beri is an Australian national residing in the State of Florida. 
He moved to the United States in 2018 and founded Elegance Brands, Inc., an entity 
whose securities were promoted by Mikula in 2019 and 2020. Beri was Elegance’s 
chief executive officer (“CEO”) and was listed as the chief financial officer (“CFO”) 
in Elegance’s filings with the Commission. Beri is also a defendant in the SEC’s 
2022 action in this Court against Mikula. 
13. Palm Beach Research Group is operated by Common Sense Publishing, 
LLC, a subsidiary of Market Wise, Inc., a U.S. public company. Palm Beach 
Research Group published Palm Beach Venture (“Palm Beach”), a subscription-based 
newsletter that focused on opportunities for investors to invest in securities offered 
under Reg A. Mikula was one of two attributed authors of the Palm Beach newsletter. 
14. Adam Levin is a resident of Venice, California. Levin founded 
Hightimes in 2017 and served as the Executive Chairman of the Board. Levin was 
also CEO of Hightimes from 2017 to 2019. Levin facilitated the promotion with Palm 
Beach on behalf of Hightimes. In 2023, the SEC filed an action against Levin in this 

 
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Court arising out of some of the same conduct at issue in this action. SEC v. Levin, 
Case No. 2:23-cv-08081 (C.D. Cal. filed Sept. 27, 2023). 
15. Hightimes is a Delaware corporation with its principal place of business 
in Los Angeles, California. Hightimes focuses on cannabis-related publications and 
platforms. Mikula promoted Hightimes through Palm Beach between April 2020 and 
March 2021. 
16. Sheldon Richard Bentley is a resident of Truckee, California. Bentley 
founded Cloudastructure in 2003 and has served as Cloudastructure’s CEO and as a 
director of the company’s board since then.  In 2023, the SEC filed an action against 
Bentley in the Eastern District of California arising out of some of the same conduct 
at issue in this action. SEC v. Bentley, Case No. 2:23-cv-02119-JDP (E.D. Cal. filed 
Sept. 27, 2023). 
17. Cloudastructure is a cloud-controlled video surveillance company 
incorporated in Delaware with its principal place of business in Miami, Florida. 
During the relevant period, Cloudastructure was headquartered in San Mateo, 
California. Mikula promoted Cloudastructure through Palm Beach between 
September 2020 and mid-2021. 
THE ALLEGATIONS 
A. The Hightimes Promotion 
18. Hightimes was initially qualified to conduct a securities offering under 
Regulation A in March 2018 and again in July 2018 pursuant to a post-qualification 
amendment. 
19. In early 2020, Levin and Mikula discussed the possible promotion of 
Hightimes through Palm Beach Venture.  
20. Mikula introduced Levin to Beri who, acting at Mikula’s behest, began 
advising Levin on how to secure Mikula’s promotion. 
21. Beri directed Levin to enter into a consulting agreement with 2749960 
Ontario, which Lopez controlled and had formed to use in connection with the 

 
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Hightimes deal.  
22. Lopez drafted and sent a consulting agreement to Levin on behalf of 
2749960 Ontario. 
23. The agreement ostensibly provided that 2749960 Ontario would perform 
“marketing services” for Hightimes. 
24. An initial draft of the agreement set the compensation terms at five 
percent of the monies raised through the Palm Beach promotion, half in cash and half 
in stock, to a maximum of $3 million. 
25. While the final agreement did not mention Palm Beach, the parties, 
including Lopez, understood that the contract required Hightimes to pay 2749960 
Ontario five percent of investor funds raised from the beginning of the Palm Beach 
promotion to the close of the offering. Lopez signed the agreement on behalf of 
2749960 Ontario.  
26. The agreement with 2749960 Ontario was a sham and a means of 
concealing payment to Mikula for the promotion.   
27. Neither 2749960 Ontario nor Lopez had any intention of providing 
services under the contract, and in fact they did not provide any services.   
28. Lopez knew, or was reckless in not knowing, that the purpose of the 
agreement was to disguise money that would be funneled to Mikula in exchange for 
the promotion. 
29. On April 6, 2020, two days after Hightimes executed the contract with 
2749960 Ontario, Palm Beach circulated an article to its subscribers touting 
Hightimes. 
30. The article contained an “important note” falsely claiming that Palm 
Beach and its affiliates were not compensated for recommending Hightimes. 
31. At all relevant times, Lopez knew, or was reckless in not knowing, that 
Mikula’s promotional Palm Beach articles disclaimed receipt of any compensation 
from the promoted issuer. 

 
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32. Between April 2020 and June 2020, Hightimes raised $6 million through 
the Palm Beach promotion. 
33. In June 2020, Lopez sent Hightimes an invoice for $150,000 for the cash 
portion of “marketing consulting services” between April and June 2020 and 
reminded Levin that the contract called for an equivalent amount in Hightimes shares.  
34. When Levin asked for an explanation of the $150,000, Lopez replied 
that it was “the marketing fee pursuant to our agreement 50% cash/50% shares. [Beri] 
mentioned to me that he confirmed with you that the Palm Beach raise was 6M.” 
35. After Levin sent the money to 2749960 Ontario, Beri relayed 
instructions from Mikula for Lopez to split the money four ways between Mikula, 
Beri, Lopez, and Fernandez.  
36. Lopez directed payments to be sent as instructed, directing Mikula’s 
share of the funds to be sent to New Age Vending, an entity that Mikula controlled. 
37. Lopez retained around one-fourth of the monies, or $37,500, for himself.   
38. Lopez knew, or was reckless in not knowing, that the Hightimes 
payments were made in exchange for Mikula’s promotion of the Hightimes offering. 
39. Lopez knowingly or recklessly concealed that a portion of the Hightimes 
payments went to Mikula. 
B. The Cloudastructure Promotion 
40. Cloudastructure was qualified to conduct a securities offering under 
Regulation A in July 2020. 
41. By early 2020, Bentley was pitching Cloudastructure to Mikula in hopes 
of getting Palm Beach to promote the company.
 
42. Mikula connected Bentley with Beri so that Beri could help 
Cloudastructure with “ironing out the logistics of making a Palm Beach feature 
happen.” In early February 2020, Bentley flew to Miami to meet with Mikula and 
Beri to discuss such a promotion.
 
43. Soon after the Miami meeting, Beri began negotiating a consulting 

 
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agreement with Bentley, representing that Palm Beach would promote the company if 
Cloudastructure paid Beri five percent of investor funds raised, which Beri intended 
to share with Mikula.
 
44. Beri’s negotiations were unsuccessful because Bentley thought Beri’s 
proposed percentage was too high, so by March 2020, Bentley resumed dealing 
directly with Mikula in his efforts to get Palm Beach to promote Cloudastructure.
 
45. At the same time in early to mid-2020, Lopez, Mikula, and Fernandez 
discussed entering a partnership to receive payments related to a potential promotion 
of Cloudastructure. In April 2020, Lopez formed Bluerock Consulting, a Canadian 
entity.
 
46. Lopez, Mikula, Fernandez, and a fourth individual served as equal 
shareholders of Bluerock.
 
47. Lopez acted as secretary, controlled Bluerock’s bank accounts, and 
directed Bluerock’s administrative actions.
 
48. Mikula was initially a named shareholder of Bluerock, but he later 
directed that his interest be replaced with Goldentown, a Mexican entity that he had 
set up to obscure his   connection to Bluerock. 
 
49. Similarly, Lopez and other shareholders of Bluerock exchanged voice 
messages where they discussed the need to conceal Mikula’s involvement in 
Bluerock. 
 
50. At all relevant times, Lopez knew, or was reckless in not knowing, that 
the Bluerock interest held by Goldentown and monies sent to Goldentown were for 
Mikula.  
 
51. In early September 2020, Fernandez, at Mikula’s instruction, contacted 
Bentley and reopened discussions about entering into a “consulting agreement” to 
conceal payments to Mikula in exchange for promoting Cloudastructure’s offering. 
Fernandez proposed that Cloudastructure would pay Fernandez less than what Beri 
had previously demanded.
 

 
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52. Fernandez referred Bentley to Lopez to execute an agreement to 
memorialize the deal. Lopez drafted and executed an agreement on behalf of 
Bluerock under which Bluerock would provide “consulting services” and 
Cloudastructure would pay cash fees in increasing amounts based on the monies 
raised. 
53. On September 4, 2020, Bentley, on behalf of Cloudastructure, executed 
the “consulting agreement” with Lopez. 
54. Four days later, on September 8, 2020, Palm Beach issued an article 
written by Mikula promoting Cloudastructure’s Regulation A offering. 
55. Lopez received a copy of the article, which again contained the 
“Important Note” falsely representing that “Neither the Palm Beach Research Group 
nor its affiliates receive compensation for bringing this deal to you.” 
56. The “consulting agreement” between Bluerock and Cloudastructure was 
a sham. Neither Lopez nor Bluerock provided any meaningful consulting services to 
Cloudastructure.
 
57. Instead, the agreement was a means of concealing Mikula’s 
compensation for his promotion of Cloudastructure.
 
58. Mikula promoted Cloudastructure’s Regulation A offering through Palm 
Beach from September 2020 through mid-2021. 
 
59. During this period Cloudastructure raised about $30 million in investor 
funds through Palm Beach’s efforts.
 
60. Lopez prepared invoices totaling $650,000 to collect Bluerock’s share of 
the fees for the promotion from Cloudastructure, which Cloudastructure paid.
 
61. At Mikula’s instruction, Lopez directed Mikula’s share of the funds to 
be sent to Goldentown, knowing that the funds were for Mikula’s benefit. 
62. Lopez retained around one-fourth of the monies, or $162,500, for 
himself.   
63. Lopez knew, or was reckless in not knowing, that the Cloudastructure 

 
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payments were made in exchange for Mikula’s promotion of the Cloudastructure 
offering. 
64. Lopez knowingly or recklessly concealed that a portion of the 
Cloudastructure payments went to Mikula. 
65. Lopez also caused Bluerock to use funds, including from 
Cloudastructure,  to pay monthly American Express bills for an account nominally in 
the name of Mikula’s personal assistant (whose salary was also paid by Bluerock) but 
which was in fact used to cover travel and other charges incurred by Mikula.
 
66. Lopez knew, or was reckless in not knowing, that the payments from 
Cloudastructure to Bluerock were in exchange for the Mikula’s promotion. 
67. Lopez knowingly or recklessly concealed that a portion of these funds 
went to Mikula. 
FIRST CLAIM FOR RELIEF 
Fraud in Connection with the Purchase or Sale of Securities 
Violations of Section 10(b) of the Exchange Act and Rules   10b-5(a) and 10b-5(c) 
68. The SEC realleges and incorporates by reference paragraphs 1 through 
67 above. 
69. Lopez—with Mikula, Fernandez, and Beri—carried out a scheme to 
defraud with the principal purpose of concealing that Hightimes and Cloudastructure 
paid for Mikula’s promotion of these issuers’ offerings. In furtherance of the scheme 
to conceal Mikula’s compensation, Lopez executed agreements with Hightimes and 
Cloudastructure on behalf of 2749960 Ontario and Bluerock and funneled payments 
under those agreements to Mikula. 
70. By engaging in the conduct described above, Lopez, directly or 
indirectly, in connection with the purchase or sale of securities, by the use of means 
or instrumentalities of interstate commerce, or the mails, (1) employed devices, 
schemes, or artifices to defraud;  and (2) engaged in acts, practices, or courses of 

 
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business which operated or would operate as a fraud or deceit upon other persons, 
including purchasers and sellers of securities. 
71. Lopez with scienter, employed devices, schemes, or artifices to defraud; 
and engaged in acts, practices, or courses of business which operated or would 
operate as a fraud or deceit upon other persons, including purchasers and sellers of 
securities by the conduct detailed above. 
72. By engaging in the conduct described above, Lopez violated, and unless 
restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act, 
15 U.S.C. § 78j(b), and Rules  10b-5(a) and 10b-5(c) thereunder, 17 C.F.R. 
§§ 240.10b-5(a), (c). 
SECOND CLAIM FOR RELIEF 
Fraud in the Offer or Sale of Securities 
Violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act 
73. The SEC realleges and incorporates by reference paragraphs 1 through 
67 above. 
74. In the offer or sale of both Hightimes securities and Cloudastructure 
securities, Lopez—with Mikula, Fernandez, and Beri—carried out a scheme to 
defraud with the principal purpose of concealing that Hightimes and Cloudastructure 
paid for Mikula’s promotion of those issuers’ offerings. In furtherance of the scheme 
to conceal Mikula’s compensation, Lopez executed agreements with Hightimes and 
Cloudastructure on behalf of 2749960 Ontario and Bluerock and funneled payments 
under those agreements to Mikula. 
75. By engaging in the conduct described above, Lopez, directly or 
indirectly, in the offer or sale of securities, by use of the means or instruments of 
transportation or communication in interstate commerce or by use of the mails (1) 
employed devices, schemes, or artifices to defraud; and (2) engaged in transactions, 
practices, or courses of business which operated or would operate as a fraud or deceit 
upon the purchaser. 

 
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76. Lopez, with scienter, employed devices, schemes, or artifices to defraud; 
and with scienter or negligence, engaged in transactions, practices, or courses of 
business which operated or would operate as a fraud or deceit upon the purchaser. 
77. By reason of the foregoing, Lopez violated, and unless restrained and 
enjoined will continue to violate, Sections 17(a)(1) and 17(a)(3) of the Securities Act, 
15 U.S.C. §§   77q(a)(1), 77q(a)(3). 
THIRD CLAIM FOR RELIEF 
Aiding and Abetting Violations of Section 17(b) of the Securities Act 
78. The SEC realleges and incorporates by reference paragraphs 1 through 
67 above. 
79. Mikula, by the use of means or instruments of transportation or 
communication in interstate commerce or by the use of the mails, published, gave 
publicity to, or circulated notices, circulars, advertisements, newspapers, articles, 
letters, investment services, or communications which, though not purporting to offer 
a security for sale, described such security for a consideration received or to be 
received, directly or indirectly, from an issuer, underwriter, or dealer, without fully 
disclosing the receipt, whether past or prospective, of such consideration and the 
amount thereof,  in violation of Section 17(b) of the Securities Act, 15 U.S.C. 
§   77q(b).  
80. Lopez knowingly or recklessly provided substantial assistance to 
Mikula’s violations by (1) using 2749960 Ontario and Bluerock to receive payments 
from Hightimes and Cloudastructure, (2) drafting consulting agreements to conceal 
that the payments were in exchange for Mikula’s promotions, (3) preparing invoices 
for those payments, and (4) directing a portion of the payments to Mikula and 
Goldentown. 
81. By engaging in the conduct described above, Lopez aided and abetted, 
and unless restrained and enjoined will continue to aid and abet, Mikula’s violations 
of Section 17(b) of the Securities Act, 15 U.S.C. § 77q(b).  

 
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PRAYER FOR RELIEF 
WHEREFORE, the SEC respectfully requests that the Court: 
I.   
Issue findings of fact and conclusions of law that Lopez committed the alleged 
violations. 
II. 
Issue judgment, in forms consistent with Rule 65(d) of the Federal Rules of 
Civil Procedure, permanently enjoining Lopez and his officers, agents, servants, 
employees,  and attorneys, and those persons in active concert or participation with 
him, who receive actual notice of the judgment by personal service or otherwise, and 
each of them, from violating Section 10(b) of the Exchange Act, 15 U.S.C. §§ 78j(b) 
and Rule 10b-5 thereunder, 17 C.F.R. §§ 240.10b-5. 
III. 
Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 
Civil Procedure, permanently enjoining Lopez and his officers, agents, servants, 
employees,  and attorneys, and those persons in active concert or participation with 
him, who receive actual notice of the judgment by personal service or otherwise, and 
each of them, from violating Section 17(a) of the Securities Act, 15 U.S.C. §   77q(a). 
IV. 
Issue judgment, in forms consistent with Rule 65(d) of the Federal Rules of 
Civil Procedure, permanently enjoining Lopez and his officers, agents, servants, 
employees, and attorneys, and those persons in active concert or participation with 
him, who receive actual notice of the judgment by personal service or otherwise, and 
each of them, from violating Section 17(b) of the Securities Act, 15 U.S.C. §77q(b). 
V. 
Enter an order permanently enjoining Lopez from promoting any issuer of any 
security, causing the promotion of any issuer of any security, or deriving 
compensation from the promotion of any issuer of any security unless a 

 
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knowledgeable U.S. securities lawyer, and not an affiliate of Lopez or the issuer, 
reviews the arrangement and affirms in writing that the arrangement is consistent 
with applicable U.S. federal securities laws and regulations; for purposes of this 
injunction, “promoting” or “promotion” means, for direct or indirect compensation or 
pecuniary benefit, directly or indirectly, engaging in, publishing, giving publicity to, 
or circulating any communication, the goal of which is to generate interest among or 
from U.S. investors in any security; provided, however, that such injunction shall not 
prevent Lopez from purchasing or selling securities unless part of a promotion as 
described herein. 
VI. 
Enter an order against Lopez, pursuant to Section 20(e) of the Securities Act, 
15 U.S.C. § 77t(e), and Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2), 
prohibiting him from acting as an officer or director of any issuer that has a class of 
securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l or 
that is required to file reports pursuant to Section 15(d) of the Exchange Act, 
15 U.S.C. § 78o(d). 
VII. 
Order Lopez to pay civil penalties under Section 20(d) of the Securities Act, 
15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). 
VIII. 
Order Lopez to disgorge all funds received from his illegal conduct, together 
with prejudgment interest thereon, pursuant to Sections 21(d)(5) and 21(d)(7) of the 
Exchange Act, 15 U.S.C. §§ 78u(d)(5), 78u(d)(7). 
IX. 
Retain jurisdiction of this action in accordance with the principles of equity and 
the Federal Rules of Civil Procedure to implement and carry out the terms of all 
orders and decrees that may be entered, or to entertain any suitable application or 
motion for additional relief within this Court’s jurisdiction. 

 
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X. 
Grant any other relief that this Court may determine to be just and necessary. 
Dated:  May 28, 2025  
 /s/ Charles E. Canter  
Charles E. Canter 
Sarah S. Nilson 
Attorneys   for Plaintiff 
Securities and Exchange Commission 
 

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CHARLES E. CANTER (Cal. Bar No. 263197) 
Email:  [email protected] 
SARAH S. NILSON (Cal. Bar No. 254574) 
Email:  [email protected] 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Brent W. Wilner, Associate Director 
Douglas M. Miller, Supervisory Trial Counsel 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 
 

vs. 

SERGIO DAMIAN LOPEZ, 

Defendant. 
 

 Case No. 
 
 
COMPLAINT 
 

 
 
 



 

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Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) files 

this complaint against Defendant Sergio Damian Lopez (“Lopez”) and alleges: 

JURISDICTION 

1. The Court has jurisdiction over this action under Sections 20(b), 

20(d)(1), and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. 

§§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of 

the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 

78u(d)(3)(A), 78u(e) & 78aa(a). 

2. Defendant has, directly or indirectly, made use of the means or 

instrumentalities of interstate commerce, of the mails, or of the facilities of a national 

securities exchange in connection with the transactions, acts, practices, and courses of 

business alleged in this complaint.  

3. Venue is proper in this district under Section 22(a) of the Securities Act, 

15 U.S.C. § 77v(a) and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), 

because some of the transactions, acts, practices, and courses of conduct constituting 

violations of the federal securities laws occurred within this district. 

SUMMARY 

4. This securities fraud enforcement action involves a scheme to conceal 

paid promotion of two securities offerings under Regulation A. 

5. Lopez’s associate, William Mikula, authored articles promoting the 

securities offerings of Hightimes Holding Corp. (“Hightimes”) and Cloudastructure, 

Inc. These articles, as Lopez knew, falsely represented to would-be investors that 

neither the newsletter publishing the articles nor the authors received any 

compensation for their recommendation. In fact, Hightimes paid $150,000 in cash—

through Lopez’s Canadian entity 2749960 Ontario Ltd.—under a sham “consulting 

agreement” that Lopez had drafted and signed. Through a separate “consulting 

agreement” that Lopez drafted and signed, Cloudastructure paid $650,000 to 

Bluerock Consulting Inc.—another entity Lopez had created. Lopez, in turn, funneled 



 

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a portion of these funds to Mikula through Mikula’s own offshore entities, 

themselves created to further conceal that the issuers were secretly paying for 

Mikula’s promotional articles. These actions gave Hightimes and Cloudastructure 

investors the misleading impression that the recommendations were objective and 

independently formed, when really they were paid-for promotions.  

6. Lopez retained about $200,000 for himself. 

7. Through his conduct, Lopez violated the antifraud provisions of 

Section 10(b) of the Exchange Act and Rules 10b-5(a) and 10b-5(c) thereunder, 

15 U.S.C. § 78j(b) and 17 C.F.R. §§ 240.10b-5(a), (c), the antifraud provisions of 

Sections 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 77q(a)(1), 

77q(a)(3), and aided and abetted Mikula’s violations of the anti-touting provisions of 

Section 17(b) of the Securities Act.   

8. The SEC seeks permanent injunctions against future violations of 

Exchange Act Section 10(b) and Rules 10b-5(a) and 10b-5(c) thereunder and 

Securities Act Sections 17(a)(1), 17(a)(3), and 17(b), a conduct-based injunction, a 

civil penalty, disgorgement with prejudgment interest, and an order barring Lopez 

from serving as an officer or director of a public company.   

THE DEFENDANT 

9. Lopez, age 42, is a Canadian securities lawyer. Since 2015, he has 

served as an officer or director of multiple companies that trade on Canadian stock 

exchanges, eight of which were quoted and traded over the counter in the United 

States. Between 2020 and 2021, he also served as an executive of an entity listed on a 

national securities exchange in the United States.  

RELATED INDIVIDUALS AND ENTITIES 

10. Mikula is a resident of Georgia, who, from at least 2019 through late 

2021, was chief analyst and author of Palm Beach Venture, a newsletter published by 

Palm Beach Research Group. Mikula is a member and part owner of New Age 

Vending LLC (“New Age Vending”), which received a portion of the funds used to 



 

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compensate Mikula for the Hightimes promotion. Mikula also used a Mexican entity, 

Goldentown Consulting SA de CV (“Goldentown”), as a nominee through which he 

received compensation in exchange for the Cloudastructure promotion. Federal 

courts, including this Court, have repeatedly enjoined Mikula from violating the 

federal securities laws, most recently in connection with conduct related to the 

promotion of Hightimes and Cloudastructure. SEC v. Mikula, Case No. 2:22-cv-

07096-SB-E (C.D. Cal. filed Sept. 30, 2022). See also SEC v. Phoenixsurf.com, et al., 

Case No. 2:07-cv-04765-JSL, ECF No. 6 (C.D. Cal. Aug. 14, 2007); SEC v. Mikula, 

Case No. 1:08-cv-03097-BBM, ECF No. 95 (N.D. Ga. Sept. 24, 2009).  

11. Christian Fernandez is a Mexican citizen residing in the State of 

Georgia. Fernandez acted as a middleman in connection with Mikula’s promotions of 

certain securities offerings, including those of Hightimes and Cloudastructure. 

Fernandez is a defendant in the SEC’s 2022 action in this Court against Mikula. 

12. Amit Raj Beri is an Australian national residing in the State of Florida. 

He moved to the United States in 2018 and founded Elegance Brands, Inc., an entity 

whose securities were promoted by Mikula in 2019 and 2020. Beri was Elegance’s 

chief executive officer (“CEO”) and was listed as the chief financial officer (“CFO”) 

in Elegance’s filings with the Commission. Beri is also a defendant in the SEC’s 

2022 action in this Court against Mikula. 

13. Palm Beach Research Group is operated by Common Sense Publishing, 

LLC, a subsidiary of Market Wise, Inc., a U.S. public company. Palm Beach 

Research Group published Palm Beach Venture (“Palm Beach”), a subscription-based 

newsletter that focused on opportunities for investors to invest in securities offered 

under Reg A. Mikula was one of two attributed authors of the Palm Beach newsletter. 

14. Adam Levin is a resident of Venice, California. Levin founded 

Hightimes in 2017 and served as the Executive Chairman of the Board. Levin was 

also CEO of Hightimes from 2017 to 2019. Levin facilitated the promotion with Palm 

Beach on behalf of Hightimes. In 2023, the SEC filed an action against Levin in this 



 

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Court arising out of some of the same conduct at issue in this action. SEC v. Levin, 

Case No. 2:23-cv-08081 (C.D. Cal. filed Sept. 27, 2023). 

15. Hightimes is a Delaware corporation with its principal place of business 

in Los Angeles, California. Hightimes focuses on cannabis-related publications and 

platforms. Mikula promoted Hightimes through Palm Beach between April 2020 and 

March 2021. 

16. Sheldon Richard Bentley is a resident of Truckee, California. Bentley 

founded Cloudastructure in 2003 and has served as Cloudastructure’s CEO and as a 

director of the company’s board since then. In 2023, the SEC filed an action against 

Bentley in the Eastern District of California arising out of some of the same conduct 

at issue in this action. SEC v. Bentley, Case No. 2:23-cv-02119-JDP (E.D. Cal. filed 

Sept. 27, 2023). 

17. Cloudastructure is a cloud-controlled video surveillance company 

incorporated in Delaware with its principal place of business in Miami, Florida. 

During the relevant period, Cloudastructure was headquartered in San Mateo, 

California. Mikula promoted Cloudastructure through Palm Beach between 

September 2020 and mid-2021. 

THE ALLEGATIONS 

A. The Hightimes Promotion 

18. Hightimes was initially qualified to conduct a securities offering under 

Regulation A in March 2018 and again in July 2018 pursuant to a post-qualification 

amendment. 

19. In early 2020, Levin and Mikula discussed the possible promotion of 

Hightimes through Palm Beach Venture.  

20. Mikula introduced Levin to Beri who, acting at Mikula’s behest, began 

advising Levin on how to secure Mikula’s promotion. 

21. Beri directed Levin to enter into a consulting agreement with 2749960 

Ontario, which Lopez controlled and had formed to use in connection with the 



 

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Hightimes deal.  

22. Lopez drafted and sent a consulting agreement to Levin on behalf of 

2749960 Ontario. 

23. The agreement ostensibly provided that 2749960 Ontario would perform 

“marketing services” for Hightimes. 

24. An initial draft of the agreement set the compensation terms at five 

percent of the monies raised through the Palm Beach promotion, half in cash and half 

in stock, to a maximum of $3 million. 

25. While the final agreement did not mention Palm Beach, the parties, 

including Lopez, understood that the contract required Hightimes to pay 2749960 

Ontario five percent of investor funds raised from the beginning of the Palm Beach 

promotion to the close of the offering. Lopez signed the agreement on behalf of 

2749960 Ontario.  

26. The agreement with 2749960 Ontario was a sham and a means of 

concealing payment to Mikula for the promotion.   

27. Neither 2749960 Ontario nor Lopez had any intention of providing 

services under the contract, and in fact they did not provide any services.   

28. Lopez knew, or was reckless in not knowing, that the purpose of the 

agreement was to disguise money that would be funneled to Mikula in exchange for 

the promotion. 

29. On April 6, 2020, two days after Hightimes executed the contract with 

2749960 Ontario, Palm Beach circulated an article to its subscribers touting 

Hightimes. 

30. The article contained an “important note” falsely claiming that Palm 

Beach and its affiliates were not compensated for recommending Hightimes. 

31. At all relevant times, Lopez knew, or was reckless in not knowing, that 

Mikula’s promotional Palm Beach articles disclaimed receipt of any compensation 

from the promoted issuer. 



 

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32. Between April 2020 and June 2020, Hightimes raised $6 million through 

the Palm Beach promotion. 

33. In June 2020, Lopez sent Hightimes an invoice for $150,000 for the cash 

portion of “marketing consulting services” between April and June 2020 and 

reminded Levin that the contract called for an equivalent amount in Hightimes shares.  

34. When Levin asked for an explanation of the $150,000, Lopez replied 

that it was “the marketing fee pursuant to our agreement 50% cash/50% shares. [Beri] 

mentioned to me that he confirmed with you that the Palm Beach raise was 6M.” 

35. After Levin sent the money to 2749960 Ontario, Beri relayed 

instructions from Mikula for Lopez to split the money four ways between Mikula, 

Beri, Lopez, and Fernandez.  

36. Lopez directed payments to be sent as instructed, directing Mikula’s 

share of the funds to be sent to New Age Vending, an entity that Mikula controlled. 

37. Lopez retained around one-fourth of the monies, or $37,500, for himself.   

38. Lopez knew, or was reckless in not knowing, that the Hightimes 

payments were made in exchange for Mikula’s promotion of the Hightimes offering. 

39. Lopez knowingly or recklessly concealed that a portion of the Hightimes 

payments went to Mikula. 

B. The Cloudastructure Promotion 

40. Cloudastructure was qualified to conduct a securities offering under 

Regulation A in July 2020. 

41. By early 2020, Bentley was pitching Cloudastructure to Mikula in hopes 

of getting Palm Beach to promote the company. 

42. Mikula connected Bentley with Beri so that Beri could help 

Cloudastructure with “ironing out the logistics of making a Palm Beach feature 

happen.” In early February 2020, Bentley flew to Miami to meet with Mikula and 

Beri to discuss such a promotion. 

43. Soon after the Miami meeting, Beri began negotiating a consulting 



 

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agreement with Bentley, representing that Palm Beach would promote the company if 

Cloudastructure paid Beri five percent of investor funds raised, which Beri intended 

to share with Mikula. 

44. Beri’s negotiations were unsuccessful because Bentley thought Beri’s 

proposed percentage was too high, so by March 2020, Bentley resumed dealing 

directly with Mikula in his efforts to get Palm Beach to promote Cloudastructure. 

45. At the same time in early to mid-2020, Lopez, Mikula, and Fernandez 

discussed entering a partnership to receive payments related to a potential promotion 

of Cloudastructure. In April 2020, Lopez formed Bluerock Consulting, a Canadian 

entity. 

46. Lopez, Mikula, Fernandez, and a fourth individual served as equal 

shareholders of Bluerock. 

47. Lopez acted as secretary, controlled Bluerock’s bank accounts, and 

directed Bluerock’s administrative actions. 

48. Mikula was initially a named shareholder of Bluerock, but he later 

directed that his interest be replaced with Goldentown, a Mexican entity that he had 

set up to obscure his connection to Bluerock.  

49. Similarly, Lopez and other shareholders of Bluerock exchanged voice 

messages where they discussed the need to conceal Mikula’s involvement in 

Bluerock.  

50. At all relevant times, Lopez knew, or was reckless in not knowing, that 

the Bluerock interest held by Goldentown and monies sent to Goldentown were for 

Mikula.   

51. In early September 2020, Fernandez, at Mikula’s instruction, contacted 

Bentley and reopened discussions about entering into a “consulting agreement” to 

conceal payments to Mikula in exchange for promoting Cloudastructure’s offering. 

Fernandez proposed that Cloudastructure would pay Fernandez less than what Beri 

had previously demanded. 



 

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52. Fernandez referred Bentley to Lopez to execute an agreement to 

memorialize the deal. Lopez drafted and executed an agreement on behalf of 

Bluerock under which Bluerock would provide “consulting services” and 

Cloudastructure would pay cash fees in increasing amounts based on the monies 

raised. 

53. On September 4, 2020, Bentley, on behalf of Cloudastructure, executed 

the “consulting agreement” with Lopez. 

54. Four days later, on September 8, 2020, Palm Beach issued an article 

written by Mikula promoting Cloudastructure’s Regulation A offering. 

55. Lopez received a copy of the article, which again contained the 

“Important Note” falsely representing that “Neither the Palm Beach Research Group 

nor its affiliates receive compensation for bringing this deal to you.” 

56. The “consulting agreement” between Bluerock and Cloudastructure was 

a sham. Neither Lopez nor Bluerock provided any meaningful consulting services to 

Cloudastructure. 

57. Instead, the agreement was a means of concealing Mikula’s 

compensation for his promotion of Cloudastructure. 

58. Mikula promoted Cloudastructure’s Regulation A offering through Palm 

Beach from September 2020 through mid-2021.  

59. During this period Cloudastructure raised about $30 million in investor 

funds through Palm Beach’s efforts. 

60. Lopez prepared invoices totaling $650,000 to collect Bluerock’s share of 

the fees for the promotion from Cloudastructure, which Cloudastructure paid. 

61. At Mikula’s instruction, Lopez directed Mikula’s share of the funds to 

be sent to Goldentown, knowing that the funds were for Mikula’s benefit. 

62. Lopez retained around one-fourth of the monies, or $162,500, for 

himself.   

63. Lopez knew, or was reckless in not knowing, that the Cloudastructure 



 

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payments were made in exchange for Mikula’s promotion of the Cloudastructure 

offering. 

64. Lopez knowingly or recklessly concealed that a portion of the 

Cloudastructure payments went to Mikula. 

65. Lopez also caused Bluerock to use funds, including from 

Cloudastructure, to pay monthly American Express bills for an account nominally in 

the name of Mikula’s personal assistant (whose salary was also paid by Bluerock) but 

which was in fact used to cover travel and other charges incurred by Mikula. 

66. Lopez knew, or was reckless in not knowing, that the payments from 

Cloudastructure to Bluerock were in exchange for the Mikula’s promotion. 

67. Lopez knowingly or recklessly concealed that a portion of these funds 

went to Mikula. 

FIRST CLAIM FOR RELIEF 

Fraud in Connection with the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rules 10b-5(a) and 10b-5(c) 

68. The SEC realleges and incorporates by reference paragraphs 1 through 

67 above. 

69. Lopez—with Mikula, Fernandez, and Beri—carried out a scheme to 

defraud with the principal purpose of concealing that Hightimes and Cloudastructure 

paid for Mikula’s promotion of these issuers’ offerings. In furtherance of the scheme 

to conceal Mikula’s compensation, Lopez executed agreements with Hightimes and 

Cloudastructure on behalf of 2749960 Ontario and Bluerock and funneled payments 

under those agreements to Mikula. 

70. By engaging in the conduct described above, Lopez, directly or 

indirectly, in connection with the purchase or sale of securities, by the use of means 

or instrumentalities of interstate commerce, or the mails, (1) employed devices, 

schemes, or artifices to defraud; and (2) engaged in acts, practices, or courses of 



 

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business which operated or would operate as a fraud or deceit upon other persons, 

including purchasers and sellers of securities. 

71. Lopez with scienter, employed devices, schemes, or artifices to defraud; 

and engaged in acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon other persons, including purchasers and sellers of 

securities by the conduct detailed above. 

72. By engaging in the conduct described above, Lopez violated, and unless 

restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act, 

15 U.S.C. § 78j(b), and Rules 10b-5(a) and 10b-5(c) thereunder, 17 C.F.R. 

§§ 240.10b-5(a), (c). 

SECOND CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Sections 17(a)(1) and 17(a)(3) of the Securities Act 

73. The SEC realleges and incorporates by reference paragraphs 1 through 

67 above. 

74. In the offer or sale of both Hightimes securities and Cloudastructure 

securities, Lopez—with Mikula, Fernandez, and Beri—carried out a scheme to 

defraud with the principal purpose of concealing that Hightimes and Cloudastructure 

paid for Mikula’s promotion of those issuers’ offerings. In furtherance of the scheme 

to conceal Mikula’s compensation, Lopez executed agreements with Hightimes and 

Cloudastructure on behalf of 2749960 Ontario and Bluerock and funneled payments 

under those agreements to Mikula. 

75. By engaging in the conduct described above, Lopez, directly or 

indirectly, in the offer or sale of securities, by use of the means or instruments of 

transportation or communication in interstate commerce or by use of the mails (1) 

employed devices, schemes, or artifices to defraud; and (2) engaged in transactions, 

practices, or courses of business which operated or would operate as a fraud or deceit 

upon the purchaser. 



 

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76. Lopez, with scienter, employed devices, schemes, or artifices to defraud; 

and with scienter or negligence, engaged in transactions, practices, or courses of 

business which operated or would operate as a fraud or deceit upon the purchaser. 

77. By reason of the foregoing, Lopez violated, and unless restrained and 

enjoined will continue to violate, Sections 17(a)(1) and 17(a)(3) of the Securities Act, 

15 U.S.C. §§ 77q(a)(1), 77q(a)(3). 

THIRD CLAIM FOR RELIEF 

Aiding and Abetting Violations of Section 17(b) of the Securities Act 

78. The SEC realleges and incorporates by reference paragraphs 1 through 

67 above. 

79. Mikula, by the use of means or instruments of transportation or 

communication in interstate commerce or by the use of the mails, published, gave 

publicity to, or circulated notices, circulars, advertisements, newspapers, articles, 

letters, investment services, or communications which, though not purporting to offer 

a security for sale, described such security for a consideration received or to be 

received, directly or indirectly, from an issuer, underwriter, or dealer, without fully 

disclosing the receipt, whether past or prospective, of such consideration and the 

amount thereof, in violation of Section 17(b) of the Securities Act, 15 U.S.C. 

§ 77q(b).  

80. Lopez knowingly or recklessly provided substantial assistance to 

Mikula’s violations by (1) using 2749960 Ontario and Bluerock to receive payments 

from Hightimes and Cloudastructure, (2) drafting consulting agreements to conceal 

that the payments were in exchange for Mikula’s promotions, (3) preparing invoices 

for those payments, and (4) directing a portion of the payments to Mikula and 

Goldentown. 

81. By engaging in the conduct described above, Lopez aided and abetted, 

and unless restrained and enjoined will continue to aid and abet, Mikula’s violations 

of Section 17(b) of the Securities Act, 15 U.S.C. § 77q(b).  



 

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PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court: 

I. 

Issue findings of fact and conclusions of law that Lopez committed the alleged 

violations. 

II. 

Issue judgment, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Lopez and his officers, agents, servants, 

employees, and attorneys, and those persons in active concert or participation with 

him, who receive actual notice of the judgment by personal service or otherwise, and 

each of them, from violating Section 10(b) of the Exchange Act, 15 U.S.C. §§ 78j(b) 

and Rule 10b-5 thereunder, 17 C.F.R. §§ 240.10b-5. 

III. 

Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Lopez and his officers, agents, servants, 

employees, and attorneys, and those persons in active concert or participation with 

him, who receive actual notice of the judgment by personal service or otherwise, and 

each of them, from violating Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a). 

IV. 

Issue judgment, in forms consistent with Rule 65(d) of the Federal Rules of 

Civil Procedure, permanently enjoining Lopez and his officers, agents, servants, 

employees, and attorneys, and those persons in active concert or participation with 

him, who receive actual notice of the judgment by personal service or otherwise, and 

each of them, from violating Section 17(b) of the Securities Act, 15 U.S.C. §77q(b). 

V. 

Enter an order permanently enjoining Lopez from promoting any issuer of any 

security, causing the promotion of any issuer of any security, or deriving 

compensation from the promotion of any issuer of any security unless a 



 

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knowledgeable U.S. securities lawyer, and not an affiliate of Lopez or the issuer, 

reviews the arrangement and affirms in writing that the arrangement is consistent 

with applicable U.S. federal securities laws and regulations; for purposes of this 

injunction, “promoting” or “promotion” means, for direct or indirect compensation or 

pecuniary benefit, directly or indirectly, engaging in, publishing, giving publicity to, 

or circulating any communication, the goal of which is to generate interest among or 

from U.S. investors in any security; provided, however, that such injunction shall not 

prevent Lopez from purchasing or selling securities unless part of a promotion as 

described herein. 

VI. 

Enter an order against Lopez, pursuant to Section 20(e) of the Securities Act, 

15 U.S.C. § 77t(e), and Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2), 

prohibiting him from acting as an officer or director of any issuer that has a class of 

securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l or 

that is required to file reports pursuant to Section 15(d) of the Exchange Act, 

15 U.S.C. § 78o(d). 

VII. 

Order Lopez to pay civil penalties under Section 20(d) of the Securities Act, 

15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). 

VIII. 

Order Lopez to disgorge all funds received from his illegal conduct, together 

with prejudgment interest thereon, pursuant to Sections 21(d)(5) and 21(d)(7) of the 

Exchange Act, 15 U.S.C. §§ 78u(d)(5), 78u(d)(7). 

IX. 

Retain jurisdiction of this action in accordance with the principles of equity and 

the Federal Rules of Civil Procedure to implement and carry out the terms of all 

orders and decrees that may be entered, or to entertain any suitable application or 

motion for additional relief within this Court’s jurisdiction. 



 

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X. 

Grant any other relief that this Court may determine to be just and necessary. 

Dated:  May 28, 2025  
 /s/ Charles E. Canter  

Charles E. Canter 
Sarah S. Nilson 
Attorneys for Plaintiff 
Securities and Exchange Commission 

 


	A. The Hightimes Promotion
	B. The Cloudastructure Promotion