He gained a social media following promoting penny stocks. Now the SEC is going after him.

PROVIDENCE – The U.S. Securities and Exchange Commission is accusing an East Greenwich father of six, who promotes himself as a self-made millionaire and stock guru under the name “GMoney," of misleading investors by failing to disclose his self-interest in the deals.

The SEC on Friday brought a 23-page complaint in U.S. District Court against Ahmed Alomari, 39, and his company, MCM Consulting.

They allege he violated securities laws by promoting at least five microcap stocks, also known as penny stocks, by failing to disclose that he was being paid to do so.

Summing up the allegations

According to the SEC, Alomari operated under the names “GMoney,” “Prime Time Media” and “Millionaire Media” and claimed to be a self-made marketing millionaire with millions of followers across celebrity gossip websites and social media outlets.

He is accused of using platforms such as X, Instagram, Facebook, investor chat rooms and text-message blasts from March 2019 through February 2022 to urge investors to buy microcap stocks while failing to reveal that he was being compensated as a consultant as required by law.

The SEC seeks to permanently bar Alomari and MCM from violating federal securities laws and anti-fraud provision. They also want to him and his company to give up the ill-gotten profits.

He may also face civil penalties, as well as an order blocking him from engaging in penny stock sales.

Who is Ahmed Alomari?

Alomari, who touts himself for creating one of the largest social media influencer networks in the world, did not return a phone call seeking comment Monday.

On a blog recounting his life's story, Alomari documents his childhood in the rough streets of Detroit and West Chicago to becoming a basketball prodigy in his father's home country of Yemen. A college dropout with pie-in-the-sky ambitions, he moved to Rhode Island after meeting his wife on MySpace.

How the SEC alleges Alomari manipulated the market

The companies Alomari promoted included:

• a medical device company

• an online gambling platform

• a pharmaceutical company

• a company that produces a cigarette alternative using hemp and CBD

Though Alomari was paid for his promotional work for each company, he disclosed his payment for that work on “just a small fraction” of his materials, despite being aware of how and when such disclosures were required, according to the SEC. Alomari did, however, include a “generic uninformative” disclosure on his profile on the social media platform X, formerly known as Twitter, which read: “Make your OWN trading decisions. I could be buying or selling any stocks mentioned,” according to the complaint.

The SEC alleges, too, that in at least two cases he personally invested in the stocks and surreptitiously sold them off high while publicly recommending that the public buy them in enthusiastic public media posts and text blasts. The agency accused Alomari of investing in stocks in two offerings and then quickly selling them off as they went public for a profit of $1.4 million, without publicly revealing his interest or the intended sales.

Allegedly uses wife a business front

In addition, the SEC accuses Alomari of publicly selling shares he had earned as compensation from his promotional services based on false representation letters confirming that the shares were available for public trading. The SEC alleges that Alomari directed his wife, whom he named as the sole officer and director of MCM Consulting, to sign the false representation letters.

According to the SEC, Alomari represented himself to be just an “authorized signer” for his wife’s business, but in reality he controlled all of MCM Consulting’s operations.

The SEC has charged Alomari and MCM Consulting with violating the anti-fraud provisions of federal securities law and of illegally promoting a security without disclosing the compensation he received, as well as of violating the registration provisions of the Securities Act. In addition, the SEC's charges Alomari with violating the anti-fraud provisions of the Exchange Act through his wife.

Property records show that the IRS has placed a lien on Alomari’s East Greenwich home for $1.4 million in allegedly unpaid taxes.

This article originally appeared on The Providence Journal: Ahmed Alomari accused of securities fraud over penny stock sales pitches