AI
Sunday, December 18, 2011 6:53:17 PM
RU-DY! Notre Dame Legend Charged In Pump-And-Dump Scheme
[ http://www.amazon.com/Rudy-Live-Blu-ray-Sean-Astin/dp/B001BWYZWA ]
Chris Barth, Forbes Staff
12/16/2011 @ 5:33PM
Some investors aren’t feeling like champions today after the SEC charged [ http://www.sec.gov/news/press/2011/2011-268.htm ] Notre Dame legend Rudy Ruettiger with scamming investors for over $11 million in 2008. Ruettiger is best known for inspiring the 1993 film Rudy, which follows his storybook success as a walk-on player on the Notre Dame football team. His pump-and-dump sports drink scheme is a less inspiring story.
According to the SEC release, Ruettiger and his business partners duped investors into believing that a low-selling sports drink was destined for the bigtime, distributing promotional material hyping the drink line’s success in fictional taste tests against competitors Gatorade and Powerade. In reality, the beverage biz was little more than a front for a penny stock scheme.
Ruettiger founded Rudy’s Beverage Inc. in 2006 in Notre Dame’s hometown, South Bend, Indiana. In 2007, according to the SEC’s charges, Rocky Brandonisio took over the company and moved its headquarters to Las Vegas.
Here’s where it gets hairy. In Vegas, Ruettiger and Brandonisio teamed up with penny stock promoter Stephen DeCesare to help bring the company public. Along with a business consultant named Kevin Quinn, DeCesare executed a reverse merger with a pink sheet shell company, which they renamed “Rudy Nutrition.” The stock traded with the ticker RUNU.
Once the company was public, DeCesare, Ruettiger and company ran a simple pump-and-dump operation, inflating false successes and manipulating trading in the stock to swindle investors out of big bucks. According to a statement from the SEC:
“False and misleading statements about the company also were made in press releases and filings with the SEC. These disingenuous promotional efforts had the predictable effect of attracting buyers to RUNU stock. In less than a month, RUNU went from trading 720 shares to more than 3 million shares, and within two weeks the price of RUNU stock climbed from 25 cents to $1.05 per share. After March 12, 2008, RUNU stock began a roller coaster ride as the scheme’s participants sold millions of RUNU shares to the market amid their simultaneous efforts to pump the stock.”
The SEC suspended the stock on September 12, 2008, and revoked the company’s registration two months later.
“Ruettiger and 10 of the scheme’s other participants have agreed to settle the SEC’s charges without admitting or denying the allegations,” says a statement from the SEC. Ruettiger has agreed to pay a sum of $382,866.
“You’re the only one who ever took me seriously,” says Sean Astin, playing Rudy in the film. Seems to me that a few too many investors took the real Rudy seriously.
Copyright 2011 Forbes.com LLC™
http://www.forbes.com/sites/chrisbarth/2011/12/16/ru-dy-notre-dame-legend-charged-in-pump-and-dump-scheme/ [with comment]
[ http://www.amazon.com/Rudy-Live-Blu-ray-Sean-Astin/dp/B001BWYZWA ]
Chris Barth, Forbes Staff
12/16/2011 @ 5:33PM
Some investors aren’t feeling like champions today after the SEC charged [ http://www.sec.gov/news/press/2011/2011-268.htm ] Notre Dame legend Rudy Ruettiger with scamming investors for over $11 million in 2008. Ruettiger is best known for inspiring the 1993 film Rudy, which follows his storybook success as a walk-on player on the Notre Dame football team. His pump-and-dump sports drink scheme is a less inspiring story.
According to the SEC release, Ruettiger and his business partners duped investors into believing that a low-selling sports drink was destined for the bigtime, distributing promotional material hyping the drink line’s success in fictional taste tests against competitors Gatorade and Powerade. In reality, the beverage biz was little more than a front for a penny stock scheme.
Ruettiger founded Rudy’s Beverage Inc. in 2006 in Notre Dame’s hometown, South Bend, Indiana. In 2007, according to the SEC’s charges, Rocky Brandonisio took over the company and moved its headquarters to Las Vegas.
Here’s where it gets hairy. In Vegas, Ruettiger and Brandonisio teamed up with penny stock promoter Stephen DeCesare to help bring the company public. Along with a business consultant named Kevin Quinn, DeCesare executed a reverse merger with a pink sheet shell company, which they renamed “Rudy Nutrition.” The stock traded with the ticker RUNU.
Once the company was public, DeCesare, Ruettiger and company ran a simple pump-and-dump operation, inflating false successes and manipulating trading in the stock to swindle investors out of big bucks. According to a statement from the SEC:
“False and misleading statements about the company also were made in press releases and filings with the SEC. These disingenuous promotional efforts had the predictable effect of attracting buyers to RUNU stock. In less than a month, RUNU went from trading 720 shares to more than 3 million shares, and within two weeks the price of RUNU stock climbed from 25 cents to $1.05 per share. After March 12, 2008, RUNU stock began a roller coaster ride as the scheme’s participants sold millions of RUNU shares to the market amid their simultaneous efforts to pump the stock.”
The SEC suspended the stock on September 12, 2008, and revoked the company’s registration two months later.
“Ruettiger and 10 of the scheme’s other participants have agreed to settle the SEC’s charges without admitting or denying the allegations,” says a statement from the SEC. Ruettiger has agreed to pay a sum of $382,866.
“You’re the only one who ever took me seriously,” says Sean Astin, playing Rudy in the film. Seems to me that a few too many investors took the real Rudy seriously.
Copyright 2011 Forbes.com LLC™
http://www.forbes.com/sites/chrisbarth/2011/12/16/ru-dy-notre-dame-legend-charged-in-pump-and-dump-scheme/ [with comment]
Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
F6
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