Indian-origin Former CEO Fined $294,000 in US For Fraud
Adesh Kumar Tyagi is former CEO and majority stakeholder in Systems America.
A penny stock company’s former CEO of Indian-origin, Adesh Kumar Tyagi, has been fined $294,000 for the charges put against him by US federal regulator, The Securities and Exchange Commission (SEC), on May 31. According to the SEC complaint, he was misrepresenting facts in press releases and engaging in manipulative trading in company stock.
Tyagi is the former CEO and majority shareholder of Systems America, which was rebranded as Cloudeeva.
The final judgement, made on August 17 in the US District Court for the Northern District of California, bans Tyagi from federal securities violation and imposes a conduct-based injunction.
The final judgment orders Tyagi to pay approximately $294,000 in disgorgement and interest. The court’s entry of judgment against Tyagi resolves this litigation in its entirety.
The SEC’s complaint against him had stated that Tyagi falsely claimed in press releases issued between July 2010 and September 2011 that the company had hundreds of customers, and supported customer operations in nearly 20 countries. The company, in fact, had only two main clients in 2010. As against their claim of supporting operations in 20 foreign countries, it did not support any operations in any foreign country in 2010 and 2011. Systems America provided services to Fortune 500 clients and had operations in India as well as the US.
In an initial disclosure he published on behalf of Systems American in 2010, Tyagi falsely claimed that he was not a party to any material litigation. He went on to say that no officer or director of the company had been named as a defendant in a criminal proceeding whereas he had been named as a defendant in two pending criminal proceedings.
Tyagi pleaded guilty to certain aspects of misconduct mentioned in SEC’s complaint in November last year.