Anyone familiar with the Super Bowl Shuffle knows that former Chicago Bear’s wide receiver Willie Gault can certainly bust a move. But the ex-National Football League (NFL) player’s enviable dance moves and rapping abilities won’t save him from the wrath of the Securities and Exchange Commission (SEC), which yesterday named him in a fraud case.
The SEC claims Gault was part of a scheme to inflate the stock prices of a heart-monitoring device company called Heart Tronics.
According to the agency, Heart Tronics’ outside counsel, Mitchell J. Stein, used Gault’s fame to fuel publicity and investor confidence. But “Stein secretly sold millions of dollars in stock while peddling false claims of Heart Tronics’ lucrative sales orders, and has been living the high life off his illicit proceeds with multiple homes, exotic cars, and private jets,” Stephen L. Cohen, an associate director in the SEC’s Division of Enforcement, told Thomson Reuters.
Authorities arrested Stein on Sunday. They charged him with engaging in a scheme to artificially inflate Heart Tronics’ stock price by creating fake purchase orders from fake customers, and then creating press releases exalting the fake sales. The Department of Justice says Stein embezzled about $8 million from secret trades.
Meanwhile, Gault is charged with violating the Sarbanes-Oxley Act. The SEC claims he defrauded an investor into taking a stake in Heart Tronics by falsely promising that the investor’s money would go toward company operations. The SEC says the money instead went into Gault’s personal brokerage account. Additionally, Gault signed public filings containing false statements about Heart Tronics’ sales.
Gault is the second ex-football player to be named in an SEC case in less than a week. On Friday, the SEC charged former Notre Dame player Daniel Ruettiger with misleading investors in a scam associated with Rudy Nutrition, an energy drink company Ruettiger founded to compete with Gatorade.