He was an inspiration to us all—Daniel "Rudy" Ruettiger was told he didn't have the grades to get a transfer into Notre Dame. And he was too little to make it onto Ara Parseghian's heralded football team. But as we all know from the movie, Rudy made it onto campus and then onto the field. Was there anything Rudy couldn't do? As it turns out, he couldn't escape the clutches of the Securities Exchange Commission, which had the now-defunct drink company Rudy Nutrition in its sights.
According to the Wall Street Journal,
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.
"The tall tales in this elaborate scheme included phony taste tests and other false information that was used to convince investors they were investing in something special," Mr. Friestad said.
The pitch worked. In less than a month, the stock went from trading 720 shares a day to more than three million shares, and within two weeks its price climbed from 25 cents to $1.05 a share.
Mr. Ruettiger, who lives in Las Vegas, agreed to pay $382,866 to settle the SEC's charges without admitting or denying them—giving up his profits of $185,750 and paying a fine of $185,750 and interest. Ten other individuals also agreed to pay penalties to settle the SEC charges.
What's next? The coach from Hoosiers turned out to be physically abusive? Seabiscuit was on steroids? Jerry Tarkanian was a gambler? (Strike that last one.)