Indian-origin ex-CEO to pay $294K in fraud

Guilty as charged ■

ADESH KUMAR Tyagi was the former CEO of Systems America, subsequently renamed Cloudeeva ■

HE HAD been charged with making false claims in press releases saying the company had hundreds of customers and supported customer operations in nearly 20 countries

New York, Aug. 22: An Indian-origin former CEO of a penny stock company charged with making false claims in press releases and engaging in manipulative trading, has been ordered to pay a hefty fine of $294,000.

Adesh Kumar Tyagi was the former CEO, sole director, and majority shareholder of Systems America, subsequently renamed Cloudeeva.

The Securities and Exchange Commission (SEC) obtained a final judgment against Mr Tyagi, who had been charged with making false claims in press releases and engaging in manipulative trading in company stock. The final judgment, entered by consent on August 17 in the US District Court for the Northern District of California, permanently enjoins Mr Tyagi from violating federal securities regulations and imposes a conduct based injunction.

The court’s entry of judgment against Mr Tyagi resolves this litigation in its entirety. The SEC’s complaint had alleged that Mr Tyagi falsely claimed in press releases he issued between July, 2010 and September, 2011 that the company had hundreds of customers and supported customer operations in nearly 20 countries when, in fact, the company had only two main clients in 2010 and did not support operations in any foreign countries in 2010 and 2011.

Mr Tyagi also allegedly falsely claimed in an initial disclosure he published on behalf of Systems American in 2010 that he was not a party to any material litigation. He pleaded guilty in November last year to certain aspects of the misconduct.