SEC Sues 2, Alleges Stock Fraud at GenesisIntermedia
Saudi financier Adnan Khashoggi and former GenesisIntermedia Inc. Chief Executive Ramy El-Batrawi were sued by U.S. regulators over claims that they orchestrated a $130-million stock loan and manipulation scheme.
From 1999 to 2001, Khashoggi, El-Batrawi and others loaned $130 million in GenesisIntermedia’s shares to broker-dealers while allegedly artificially inflating the stock price, the Securities and Exchange Commission said Thursday. El-Batrawi failed to repay the loans when the alleged scheme collapsed, causing some of the dealer-brokers to go bankrupt, the SEC said.
GenesisIntermedia is a defunct Van Nuys-based telemarketing company that was 85% owned by El-Batrawi and Khashoggi.
Last year, a California jury acquitted financial commentator Courtney D. Smith of charges that he failed to disclose payments he received from GenesisIntermedia to promote the company’s stock.
Attorneys for El-Batrawi and Khashoggi couldn’t be immediately located to comment. SEC attorney Kara Brockmeyer said the agency hadn’t determined who the attorneys for El-Batrawi and Khashoggi were.