December 17, 2011 by staff
Rudy Ruettiger, The inspirational 1993 movie “Rudy” celebrates Daniel Ruettiger as a plucky underdog who overcomes long odds and his diminutive stature to earn a walk-on role on Notre Dame’s legendary college-football team.
But in a settlement announced on Friday, the Securities and Exchange Commission casts Mr. Ruettiger in a far less heroic light—as a key participant in a so-called pump-and-dump stock scheme that generated more than $11 million in allegedly illicit profits for a now-defunct beverage company, Rudy Nutrition.
“Investors were lured into the scheme by Mr. Ruettiger’s well-known, feel-good story but found themselves in a situation that did not have a happy ending,” said Scott Friestad, associate director of the SEC’s division of enforcement.
The company made and sold a sports drink called “Rudy” with the tagline “Dream Big! Never Quit!” But the SEC charged that Mr. Ruettiger and 12 others made false and misleading statements about their company in news releases, SEC filings and promotional materials during 2008 in a scheme to lure investors, inflate the stock price and then sell their shares at a profit.
For instance, a letter to potential investors falsely claimed that in “a major southwest test, Rudy outsold Gatorade 2 to 1!” the SEC said in its complaint.
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