RI Businessman Who Goes by “G Money” is Being Sued by SEC for Fraud and Securities Violations
Tuesday, May 07, 2024
Alomari's Instagram page promotes his business -- and lavish lifestyle. PHOTO: Alomari Instagram business promotion
The entrepreneur says he is “known as one of the most sought-after social media marketing and Investment consultants in the online business community,” and boasts nearly 100,000 Instagram followers.
Through his consulting business, he urges potential clients to “learn the principles of success that took me from pizza delivery guy to multi-mllionaire before 30.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTNow, he is being sued by the United States Securities and Exchange Commission (SEC) for fraud and securities violations.
In a 23-page federal complaint filed this week in United States District Court in Rhode Island, the SEC said it is bringing the action against Alomari and his business MCM Consulting for “touting, fraudulently recommending while selling stock without adequately disclosing the intent to sell, and other violations related to his stock promotion services. “
Alomari’s Story and SEC Charges
According to Alomari’s website, he grew up in Detroit before moving with his family to Yemen, where “he had NBA dreams” — before dropping out of college to pursue music, and then moving to Rhode Island where he started a family and his own businesses.
He said in the period of next 2 years, he “built 3 more seven-figure businesses and co-founded two multi-million dollar startups in the education and lifestyle spaces.”
A Forbes contributor featured him in "Three Upscale Rhode Island Restaurants Perfect For Business Meetings, According To Entrepreneur Ahmed Alomari."
It was his promotion of penny stocks in 2019 however that garnered the attention of the SEC.
“Alomari is a self-described social media marketing guru who was hired and compensated to promote the stock offerings of at least five companies that were 'microcap stocks.' Some of these companies had stock that traded for prices less than $5 per share, which are commonly known as 'penny stocks,’” wrote the SEC in their lawsuit.
"Over the next 2 years I took $15,000 and turned it into nearly $3,100,000 by building one of the largest social media influencer arb networks in the World," according to his website.
Social Media Key to Promotion
According to the SEC, "Under such names as “GMoney,” “Prime Time Media” and “Millionaire Media,” Alomari claimed to be a self-made marketing millionaire with millions of followers across celebrity gossip websites and social media feeds."
"After years of purported success in the social media market, in or about early 2019, Alomari ventured into the stock promotion business. To do so, Alomari used several social media accounts on Twitter (Marijuana Stocks, IBuyCheapStocks, CheapStocksUs), Instagram (Penny Stock Advice), Facebook (GMoney, Lisa Raye, MMJ Lovers, Nasdaq Stocks), and stock-related websites (Nasdaqstocks.com and MMJstocks.com). Alomari has conducted his stock promotional activities through several means, including: (1) Twitter; (2) Facebook; (3) Instagram; (4) the Investors Underground public chat room; (5) Alomari’s www.nasdaqstocks.com website; and (6) “Nasdaq Stock Alerts” text blasts to a list of phone numbers maintained by Alomari," wrote the SEC in the complaint.
According to the SEC’s lawsuit:
“Some microcap companies pay stock promoters to recommend or 'tout' stock in unsolicited electronic communications, such as emails, texts, social media posts or internet chatrooms. The Federal securities laws require the publishers to disclose who paid them for the promotion, the amount, and the type of payment.
From at least March 2019 and continuing to February 2022, Alomari used such outlets as Twitter, Instagram, Facebook, and investor chatrooms to promote at least five microcap stocks without disclosing the source or amount of his compensation. “
The SEC then goes on to allege the following:
“Alomari not only touted these stocks without proper disclosures, but also acquired a substantial number of shares in some of the companies which he surreptitiously sold at the time of his recommendations. For example, Alomari personally invested in two initial public offerings (IPOs) which he was hired to promote. An IPO generally refers to when a company first sells shares of its stock to the public. IPOs of all but the smallest of companies are offered to the public through an underwriter, a firm that agrees to purchase the shares from the issuing company and then sell the shares to investors. The underwriter in consultation with the company decides on the basic terms and structure of the offering well before trading starts, including the percentage of shares sold to persons prior to the IPO – called allocations or subscriptions. Underwriters typically sell allocations or subscriptions to institutional and wealthy investors who are better able to buy large blocks of IPO shares, assume the financial risk, and hold the investment for the long term.
Alomari subscribed to the IPOs of two issuers, while also being hired to promote the stock around that time. Stocks are susceptible to dramatic price movements in the first few days of public trading given their stock prices are unsettled and the possibly heightened interest in new companies, especially where hype is created around them. In fact, one of the two stocks in which Alomari bought IPO shares – and promoted – increased by over 500% in just its first day of trading. While promoting these two IPOs, Alomari quickly sold his entire IPO positions for at least $1.4 million in profits without disclosing to the public his actual or intended sales.
After the IPOs, Alomari continued to recommend the purchase of the stocks to the public at times when he was selling his personal holdings in those stocks. Alomari also was able to publicly sell shares he had earned from his promotional services based on false representation letters as to the shares being available for public trading.”
The SEC also maintains Alomari used his wife as a "front" at the helm of his consulting business to conduct his affairs.
"Alomari used his wife as a front for MCM Consulting. Alomari installed his wife as the purported sole officer and director of MCM Consulting and directed her to sign an array of documents in connection with his stock promotional services and compensation, including broker deposit forms and false representation letters. Alomari purported to be just an 'authorized signer' for his wife’s entity, but in reality he controlled all of MCM Consulting’s operations and transactions," according to the SEC.
SEC Seeks to Monetary Penalties and Prohibit Activities
The SEC is seeking claims for relief from Alomari for violations of the Securities Act and Exchange Act.
They include requesting that the court issue an injunction prohibiting him from continuing to violate the Securities and Exchange Acts; issue an order directing Alomari and MCM Consulting to "disgorge all ill-gotten gains or proceeds received" as a result of the acts and/or courses of conduct complained of [in the suit]; and issue an order directing Alomari and MCM Consulting to pay a civil money penalty.
The SEC also requests that the court prohibit Alomari from participating in an offering of penny stock including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock; and bar Alomari from acting as an officer or director of any issuer that has a class of registered securities.
Alomari did not respond to request for comment at time of publication.
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