(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.
Stein was convicted in 2013 of fraud in a related criminal case, and is serving a 17-year prison term.
“We think the judge imposed remedies far exceeding what is provided under the law,” Newhouse said in a phone interview, referring to the final judgment against Gault.
“Since the jury clearly, and unequivocally, rejected any fraud by our client, it is wholly inappropriate to require disgorgement,” he added. “No proceeds from any fraud went into Mr. Gault’s pocket, and he was a victim of fraud by Mr. Stein.”
Andrew Ceresney, head of the SEC enforcement division, in a statement said Selna’s order reflects the seriousness of Gault’s actions, and ”reinforces the importance of CEOs understanding their obligations under the federal securities laws.”
Gault played 11 seasons in the NFL with the Chicago Bears and Los Angeles Raiders, winning Super Bowl XX with the Bears in 1986. He was also on the U.S. Olympic team that boycotted the 1980 Summer Games in Moscow.
The case is SEC v Gault, U.S. District Court, Central District of California, No. 11-01962.
Reporting by Jonathan Stempel in New York; Editing by Jeffrey Benkoe and Grant McCool