US Court Rules Vs InfoUSA, Inc. Former CFOs
A chief United States district judge, entered final judgments against Rajnish K. Das and Stormy L. Dean, two former chief financial officers of infoUSA, Inc., an Omaha-based database marketing company.
The court entered final judgments prohibiting Das and Dean each from serving as an officer and director of a public company for a period of three years from the date of the final judgments.
In addition, the court ordered Das and Dean to pay civil penalties of $50,000 each, and specifically prohibited them from seeking payment, reimbursement, or indemnification from any third party for payment of the civil penalties or the cost of the bond required to stay enforcement of the civil penalties in the event of an appeal. The court also declared that Das and Dean each acted in bad faith towards the shareholders of infoUSA, Inc. and that the defendants each knew their actions were contrary to the interests of the company and its shareholders.
On March 2, 2012, after approximately two hours of deliberations, an Omaha jury found Das and Dean each liable on all claims. At trial, the Commission argued former chief executive officer Vinod Gupta used company funds to pay for his personal expenses including private jet flights, yacht expenses, private club memberships, credit card expenses, and expenses associated with his homes and cars.
The SEC argued that Das and Dean each authorized the company to pay for Gupta’s personal expenses and that they signed and certified Info’s false public filings which underreported Gupta’s executive compensation and related party transactions.
In its Memorandum and Order on remedies, the court stated that “[t]he testimony and other evidence at trial clearly supported the jury’s verdicts” and “[t]he wrongdoing giving rise to this action was not an isolated incident, but a continuing and systematic misuse of corporate funds and failure to abide by SEC reporting requirements for executive compensation and related party transactions.
Das and Dean continue to deny wrongdoing, despite clear and compelling evidence of their misconduct.” The case was prosecuted by Thomas Krysa, Gregory Kasper, and Nicholas Heinke of the Commission’s Denver Regional Office.