Litigation Release No. 24796 / April 16, 2020
Securities and Exchange Commission v. Revolutionary Concepts, Inc., et al., No. 1:18-cv-01832-RWS (N.D. GA filed April 27, 2018)
On April 10, 2020, the United States District Court for the Northern District of Georgia granted the SEC’s motion for partial summary judgment on its fraud and beneficial ownership reporting claims against Solomon RC Ali (a/k/a Richard M. Carter).
The SEC’s complaint alleges that Ali, while a Senior Vice President at Revolutionary Concepts, Inc. (REVO), arranged for REVO to enter into several sham transactions with companies that he portrayed as independent. Ali then touted the sham transactions in press releases as being highly lucrative for REVO, and claimed that REVO acquired valuable assets from the deals. In reality, according to the complaint, Ali had close ties to the other companies, the assets REVO acquired were essentially worthless, and Ali’s claim that REVO could earn millions of dollars from the deals was baseless.
The court awarded the SEC summary judgment on its fraud claims based on material misrepresentations and omissions made by Ali in REVO’s press releases. Specifically, the court concluded that Ali was, at a minimum, reckless when he made the false statements about the deals, and when he failed to inform investors that the deals were not arms-length transactions. In addition, the court found that the SEC was entitled to summary judgment on its claim that Ali failed to report his beneficial ownership of more than 18 million shares of REVO stock.
The court will determine remedies at a later time. In its order, the court also struck Ali’s counterclaim and denied several motions that he had filed.
The SEC is represented by H.B. Roback, Lucy Graetz, William P. Hicks, and M. Graham Loomis.