The U.S. Securities and Exchange Commission today sued California-based Heart Tronics and six individuals, including former pro football playerWillie Gault, alleging fraud aimed at inflating the company’s stock.
The SEC said in a statement that Gault and former Hollywood executive J. Rowland Perkins were named co-chief executive officers and served mainly as figureheads in the company to build investor confidence. Lawyer Mitchell Stein controlled most of the company’s business activities and hired promoters to praise Hert Tronics stock on the Internet, reaping almost $8 million from secret trades, according to the statement.
Gault and Perkins rarely questioned Stein’s fraudulent activity and “abdicated” their responsibilities under the Sarbanes-Oxley Act, the SEC said.
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