GenesisIntermedia Chief Executive Accused of Fraud

Principals of Van Nuys-based telemarketer GenesisIntermedia Inc. are facing another lawsuit alleging fraud.

In a suit released Thursday in Delaware Chancery Court, shareholder Joseph Touchstone alleges that former Chief Executive Ramy El-Batrawi engaged in insider dealing and asks a judge to make him pay back to the company his profit from a $3.9-million sale of stock.

Touchstone accuses GenesisIntermedia directors of “acquiescing in the company’s issuance of materially misleading and inaccurate information” promoting the firm’s purchase of an Internet company owned by financial commentator Courtney Smith.

In TV appearances earlier this year, Smith recommended investors buy GenesisIntermedia shares.

Trading in the stock has been suspended since Sept. 25 amid a Securities and Exchange Commission investigation. The stock had soared from $6 at the start of the year to as high as $18.77 in June. The price collapsed in September before trading was halted. The last sale price was $5.90 on Nasdaq.

Touchstone also alleges that the actions of directors exposed the company to costly shareholder class-action lawsuits, including several already filed in California.

Officials of GenesisIntermedia couldn’t be reached for comment.