Posted: Dec 20, 2011 5:18 PM by Matt Stafford
Updated: Dec 20, 2011 5:19 PM
LOS ANGELES (AP) - The Securities and Exchange Commission is suing former NFL wide receiver Willie Gault and five others, accusing them of a scam to artificially inflate the stock of a heart monitoring device company.
Federal regulators filed a civil complaint Tuesday in Los Angeles alleging that Gault, talent agent J. Rowland Perkins and attorney Mitchell Stein defrauded investors. The lawsuit seeks the return of ill-gotten gains.
Authorities say Stein reaped nearly $8 million using Gault's and Perkins' celebrity status to foster investor confidence in Heart Tronics Inc., which sells electrocardiograms. Stein and Gault are accused of diverting investors' money for their personal use.
Jared Scharf, who represents Heart Tronics, Gault and Perkins; denies the allegations. It's unknown if Stein has retained an attorney.
The complaint describes the three other defendants as a stock promoter, a stockbroker and a handyman.