Ex-NFL star Gault ordered to pay fine in SEC fraud case

Reuters News
Posted: Apr 15, 2016 9:46 AM

By Jonathan Stempel

(Reuters) - Willie Gault, the former National Football League wide receiver and Olympic sprinter, was ordered to pay $206,571 to settle a U.S. Securities and Exchange Commission lawsuit over his role in a scheme to inflate the stock price of a heart-monitoring device maker.

Gault, who was co-chief executive officer of Heart Tronics Inc, was told to pay a $78,000 civil fine and give up $101,000 in ill-gotten gains plus $27,571 in interest. He was also banned from being an officer or director of public companies.

The terms were outlined in a final judgment issued on Thursday by U.S. District Judge James Selna of the federal court in Santa Ana, California. Gault had argued that no sanctions, or at most a minimal fine, were warranted.

George Newhouse, Gault's lawyer, was not immediately available for comment on Friday.

A federal jury in March 2015 cleared Gault of fraud, but found him liable for filing false certifications with the SEC and circumventing the company's internal controls.

The SEC had sued Gault and others affiliated with Heart Tronics in December 2011.

Among the defendants was Mitchell Stein, a lawyer who the SEC said controlled much of Heart Tronics' business, hired promoters to tout its stock online, and installed Gault as co-CEO to drum up publicity.

Stein was convicted in 2013 of fraud in a related criminal case, and is serving a 17-year prison term.

Gault played 11 seasons in the NFL with the Chicago Bears and Los Angeles Raiders, winning Super Bowl XX with the Bears in 1986. He was also on the U.S. Olympic team that boycotted the 1980 Summer Games in Moscow.

The case is SEC v Gault, U.S. District Court, Central District of California, No. 11-01962.

(The story was refiled to correct the headline and the first three paragraphs to show sanctions were ordered by a federal judge and not part of a settlement, and that Gault had contested the sanctions)

(Reporting by Jonathan Stempel in New York; Editing by Jeffrey Benkoe)