Ex-NFL star Gault is fined in SEC fraud case, will appeal

Fri Apr 15, 2016 5:18pm EDT
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By Jonathan Stempel

(Reuters) - Willie Gault, the former National Football League wide receiver and Olympic sprinter, was ordered to pay $206,571 to settle a U.S. Securities and Exchange Commission lawsuit over his role in a scheme to inflate the stock price of a heart-monitoring device maker.

U.S. District Judge James Selna of the Santa Ana, California federal court ordered Gault, who was co-chief executive officer of Heart Tronics Inc, to pay a $78,000 civil fine and give up $101,000 in ill-gotten gains plus $27,571 in interest.

The judge also banned Gault from serving as an officer or director of public companies, in a final judgment issued on Thursday.

Gault had argued that no sanctions, or at most a minimal fine, were warranted.

A federal jury in March 2015 cleared Gault of intentionally committing fraud, but found him liable on less serious charges, including filing false certifications with the SEC and circumventing Heart Tronics' internal controls.

George Newhouse, a partner at the Dentons law firm representing Gault, said his client will appeal.

The SEC had sued Gault and others affiliated with Heart Tronics in December 2011.

Among the defendants was Mitchell Stein, a lawyer who the SEC said controlled much of Heart Tronics' business, hired promoters to tout its stock online, and installed Gault as co-CEO to drum up publicity.   Continued...

Former NFL football player Willie Gault is seen after the race in the men's super 60m dash at the 103rd Millrose Games at Madison Square Garden in New York in this January 29, 2010, file photo. REUTERS/Mike Segar/Files