'Rudy' Stock Fraud Charges Settled for $4.5M
By MIKE HEUER
LAS VEGAS (CN) - For his role in a "pump-and-dump" scheme involving former Notre Dame football player Daniel "Rudy" Ruettiger, a stock promoter will pay $4.4 million.
U.S. District Judge Jennifer Dorsey ordered Pawel Dynkowski on Wednesday to disgorge more than $2 million in profits obtained from the stock fraud, plus that amount in penalties, and more than $467,000 in interest, as requested by the Securities and Exchange Commission.
SEC officials say the stock scheme arose from the sale of shares in Rudy Nutrition, a now-closed sports-drink company that traded under the RUDN symbol.
Federal investigators say Ruettiger, Dynkowski and others bilked investors of $11 million when they made false statements in their promotional materials, news releases and SEC filings, to boost share prices so they could sell them at a profit. Among falsehoods used to boost stock prices was a claim that the Rudy sports drink beat Gatorade by a 2-to-1 margin in taste tests, the SEC alleged.
The fraudsters succeeded in inflating Rudy Nutrition's stock price from 25 cents to $1.05 and increasing demand over about a month before they sold their shares, the Wall Street Journal reported.
Ruettiger settled with the SEC for $382,866, according to the Wall Street Journal.
Portrayed as an undersized and overachieving member of the Notre Dame football team, the 1993 film "Rudy" made Ruettiger an icon.
Dynkowski is a stock promoter from Poland.
