SEC Charges North Carolina-Based Microcap Company, its CEO, and Others in Scheme to Defraud Investors
Litigation Release No. 24126 May 2, 2018
Securities and Exchange Commission v. Revolutionary Concepts, Inc., Solomon RC Ali (a/k/a Richard M. Carter), Earnest H. DeLong, Jr., Rainco Industries, Inc., and Nicole C. Singletary, No. 1:18-cv-01832-RWS (N.D. GA filed April 27, 2018)
The Securities and Exchange Commission has charged a microcap public company based in Charlotte, North Carolina, the company’s CEO, and other individuals in connection with an alleged scheme to defraud investors.
The SEC’s complaint, filed in federal court in Atlanta, Georgia, alleges that Revolutionary Concepts, Inc. (REVO) and its CEO/director, Solomon RC Ali (also known as Richard M. Carter), violated antifraud and reporting provisions of the federal securities laws. According to the complaint, under Ali’s direction, REVO entered into transactions that involved persons with close, but undisclosed, relationships to Ali, and then made false and misleading statements about the transactions in press releases and public filings with the SEC.
The SEC’s complaint also alleges that Rainco Industries, Inc. and Nicole C. Singletary, who have close ties to Ali, aided and abetted the fraud. In addition, the complaint alleges that Ali, Rainco, Singletary, and Atlanta, Georgia attorney Earnest H. (Woody) DeLong, Jr. violated beneficial ownership reporting requirements of the federal securities laws. Furthermore, the complaint alleges that Ali is liable for antifraud and reporting violations by microcap public company Universal Bioenergy, Inc. (UBRG). Subject to court approval, REVO, Rainco, Singletary, and DeLong have agreed to settle the action. The litigation against Ali is ongoing. The SEC’s complaint against Ali seeks an injunction, disgorgement of ill-gotten gains plus interest, civil penalties, a penny stock bar, and an officer and director bar.
REVO, Rainco, Singletary, and DeLong consented to final judgments, without admitting or denying the allegations. Each of the settling defendants has agreed to pay $25,000 civil penalties. In addition, REVO consented to permanent injunctions from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(a) of the Securities Exchange Act of 1934, and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. Rainco and Singletary each consented to permanent injunctions from future violations of Section 17(a) of the Securities Act, Sections 10(b) and 13(d) of the Exchange Act, and Rules 10b-5 and 13d-1 thereunder; a five-year penny stock bar; and, as to Singletary, a five-year officer and director bar. DeLong consented to permanent injunctions from future violations of Sections 13(d) and 16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder; a five-year penny stock bar; and, a five-year officer and director bar.
In addition, subject to court approval of the settlement, DeLong consented to the entry of an order, without admitting or denying the findings, suspending him from appearing and practicing before the SEC as an attorney.
The SEC also has instituted a settled administrative proceeding against REVO (Rel. No. 83136, April 30, 2018), and an unsettled administrative proceeding against UBRG (Rel. No. 83135, April 30, 2018), pursuant to Section 12(j) of the Securities Exchange Act of 1934, arising from their alleged failures to comply with reporting requirements. REVO consented, without admitting or denying the findings, to an administrative order that revokes REVO’s securities registrations. The matter relating to UBRG will be scheduled for a public hearing before an administrative law judge, who will prepare an initial decision stating whether the Enforcement Division has proven the allegations in the SEC order and what, if any, remedial actions are appropriate.