Ten Year Bars Imposed for False Statements
False statements have long been at the center of many Commission enforcement actions. Early last year the agency won summary judgment in a case that centered not just on false statements but also sham transactions. Now the Court has entered a final judgment. SEC v. Revolutionary Concepts, Inc., Civil Action No. 1:18-cv-01832 (N.D. GA.).
The judgement was entered against firm executive Solomon RC Ali a/ka/ Richard M. Carter, a former senior vice president of the company. The complaint alleged that several sham transactions touted as having a positive impact on the company in press releases were false. The Court concluded that Defendants had violated Securities Act Section 17(a) and Exchange Act Section 10(b) by making the false statements about the deals and not informing investors that none of the transactions were arms-length. The Court also found that Mr. Ali failed to comply with his reporting requirements under Exchange Act Section 16(a) regarding the 18 million shares of the firm he controls. Accordingly, summary judgment was entered in favor of the Commission.
The Court entered a final judgment against Mr. Ali on January 22, 2021. It enjoined him from future violations of Securities Act Section 17(a) and Exchange Act Sections 10(b) and 16(a). The Court also imposed a ten-year officer and director bar and a ten-year penny stock bar against the former executive. Mr. Ali was ordered to pay a civil penalty of $107,500. See Lit. Rel. No. 25019 (Jan. 29 2021).