In June of this year, the Securities and Exchange Commission filed fraud charges against Adesh Kumar Tyagi. The defendant is the former CEO of Systems America Inc., which was later renamed to Cloudeeva Inc.
Tyagi was accused of making false statements in press releases issued between July 2010 and September 2011. The defendant claimed that the company had hundreds of customers and support operations in nearly 20 countries. In reality, it only had two main clients in 2010 and did not support operations in any foreign countries in 2010 and 2011.
In an Initial Disclosure submitted in July of 2010, Tyagi claimed he was not a party to any material litigation. In Annual Reports published on February 24, 2011 and July 24, 2012, Tyagi insisted no officer or director with the company had been named as a defendant in a criminal proceeding.
The defendant had actually been named in two pending criminal proceedings at the time of each publication. The SEC also alleged that the defendant placed buy limit orders in small increments during individual trade days and marked the close on at least 16 trade dates in an attempt to artificially inflate the share price and volume.
Finally, the SEC alleged that Tyagi had failed to submit required disclosure of his holdings and transactions in the company’s securities with the SEC. On August 17, 2017, Honorable Jeffrey S. White of the United States District Court for the North District of California enjoined Tyagi from violating certain rules. The judge also imposed a conduct based injunction and officer-and-director and penny stock bars.
Tyagi has been ordered to pay $294,000 in disgorgement and interest. The judgment resolves the related litigation in its entirety.
