The Washington, D.C.-based U.S. Securities and Exchange Commission (SEC) has charged a lawyer in New York City and a pair of Canadian stock promoters with planning a pump-and-dump scheme for micro-capitalization stocks.

The SEC announced fraud charges on Tuesday against securities lawyer Adam Gottbetter, and two Vancouver men, Mitchell Adam and David Stevenson, in connection with alleged market manipulation.

Gottbetter orchestrated promotional campaigns to inflate the stock prices of two micro-cap companies and generate illicit trading profits, the SEC alleged, and he enlisted the Canadian men in the last of three schemes that he conducted over a six-year period.

Gottbetter agreed to pay US$4.6 million and to be banned from the penny stock business to settle the SEC’s charges against him.

Stevenson also settled, agreeing to be barred from the penny stock industry.

Adam has been charged with conspiracy to commit securities, mail and wire fraud, and the case against him will be litigated in federal court in Newark, N.J.

He is presumed innocent until proven guilty, and the settlements with the SEC remain subject to court approval.

In a parallel action, the U.S. Attorney’s Office for the District of New Jersey also announced criminal charges against the trio, the SEC announced.

Gottbetter was involved in the manipulation of the stocks of Kentucky USA Energy Inc. and Dynastar Holdings Inc., according to the SEC’s complaint.

He then joined with Adam and Stevenson in July 2013 to carry out a scheme to drive up the stock price for purported oil and gas exploration company HBP Energy Corp., the SEC alleges, but that this scheme was uncovered before it could really be carried out.

“While Stevenson and Adam managed to do some small co-ordinated trades, the scheme was thwarted before the planned manipulation and promotion could be launched when Stevenson was arrested by the FBI,” the SEC says.

“As a securities lawyer, Gottbetter should have served as a gatekeeper and protected the capital markets and investors from fraudsters,” says Andrew Ceresney, director of the SEC’s division of enforcement. “Instead, he swung the gates wide open and illicitly profited at investors’ expense.”

Gottbetter was sentenced on Tuesday to 18 months in prison after pleading guilty to conspiracy to commit securities and mail fraud. U.S. district court judge Jose Linares imposed the sentence in Newark federal court.

Stevenson also pled guilty to conspiracy to commit securities and mail fraud. He is scheduled to be sentenced on May 28.