Securities and Exchange Commission v. Alomari, 1:24-cv-00172

The SEC brought a civil fraud action against Ahmed Alomari and his entity, MCM Consulting, alleging violations of federal securities laws based on stock promotion and subsequent undisclosed selling.
Alomari was hired by microcap companies (notably EBET, Volcon, and Soliton) to promote their stocks on social media and message boards; he allegedly failed to disclose he was compensated and was selling or planned to sell the stocks he was touting.
Alomari used both restricted and unrestricted shares, arranging transfers and using representation letters falsely signed by his wife (MCM’s nominal officer/director) to evade trading limitations on restricted shares.
The complaint includes allegations of material omissions, deceptive conduct, and scienter (intent to defraud), focusing on Alomari's undisclosed sales at times he was recommending others buy.
Defendants moved to dismiss three counts: Section 17(a) (fraud), Section 10(b) and Rule 10b-5 (fraud), and Section 20(b) (using another to violate the law); the court considered whether the SEC’s claims were sufficiently pled.
The decision denied the motion to dismiss, finding the SEC’s allegations, taken as true at this stage, stated plausible claims under the relevant statutes.

Issue	Plaintiff’s Argument	Defendant’s Argument	Held
Did Alomari engage in fraud by promoting stocks while secretly selling them?	Alomari promoted stocks while selling his own, failing to disclose this to investors.	No duty to investors; generic Twitter disclaimer sufficed; no omission or fraud.	Sufficient claims for fraud stated; motion to dismiss denied.
Did Alomari make material misstatements or omissions with scienter under securities laws?	Alomari concealed intent to sell, employed deceptive devices (falsified letters), and did so knowingly.	No scienter; omission not material; posts warned followers he could be selling.	Allegations of intent and timing plausibly show scienter.
Does Section 20(b) require the third party (his wife) to independently violate the law or for Alomari to exercise control?	Alomari unlawfully used his wife’s signature to circumvent restrictions, violating the statute.	Statute requires a showing of control or independent wrongdoing by his wife.	Statute covers use of third parties regardless of control; claim survives.
Are the SEC’s pleadings sufficiently specific (Rule 9(b)) as to the alleged fraudulent acts?	Alleged specifics: time, manner, and context of promotions/sales and deception.	General denials; claimed boilerplate allegations lacking particularity.	Pleadings meet particularity requirement.

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard is plausibility, not possibility)
Ashcroft v. Iqbal, 556 U.S. 662 (complaints require more than conclusory statements)
Rodriguez-Reyes v. Molina-Rodriguez, 711 F.3d 49 (Twombly/Iqbal plausibility in First Circuit)
SEC v. First Jersey Sec., Inc., 101 F.3d 1450 (securities fraud elements and scienter)
SEC v. Fife, 311 F.3d 1 (scienter means intent or knowing misconduct)
Roeder v. Alpha Indus., Inc., 814 F.2d 22 (duty to make disclosures complete and accurate)
SEC v. Ficken, 546 F.3d 45 (scienter; recklessness standard)
Aldridge v. A.T. Cross Corp., 284 F.3d 72 (scienter: knowledge of misleading statements)
In re Hill, 562 F.3d 29 (statutory interpretation; plain meaning)
In re BankVest Cap. Corp., 360 F.3d 291 (statutory interpretation begins with plain text)