Linus Unah – Fourth Estate Contributor
Washington, D.C., United States (4E) – The U.S. Securities and Exchange Commission (SEC) has filed fraud charges against Adesh Kumar Tyagi, the former chief executive officer and majority shareholder of Systems America, Inc., subsequently renamed Cloudeeva Inc.
The SEC’s complaint, filed in California federal court this week, alleged that Tyagi, 49, 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.
However, the SEC said that the company had only two main clients in 2010 and did not support operations in any foreign countries in 2010 and 2011.
Tyagi also allegedly falsely claimed in a disclosure published on behalf of Systems American in 2010 that he was not a party to any material litigation.
In the company’s annual reports for 2011 and 2014, he allegedly claimed that no officer or director of the company had been named as a defendant in a criminal proceeding.
But, he had been named as a defendant in two pending criminal proceedings at the time of each publication, according to the SEC.
The complaint also alleges that Tyagi placed buy limit orders during individual trading days to artificially inflate the share price and trading volume of the company’s securities.
The SEC’s complaint further alleged that Tyagi failed to file with the SEC required disclosures of his holdings and transactions in company securities.
The federal agency is seeking, among other things, an order requiring Tyagi to repay $274,610 in ill-gotten gains, plus prejudgment interest.
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