On Monday, the SEC filed cases against former senior executives and a former director of infoUSA Inc. (Info). The SEC claims that from 2003-2007, Vinod Gupta, Info’s former CEO and Chairman, Vasant Raval, former chairman of Info’s audit committee, and Rajnish K. Das and Stormy Dean, Info’s CFOs caused Info to pay Gupta almost $9.5 million of unauthorized and undisclosed perquisites and to enter into $9.3 million of undisclosed related party transactions with Gupta’s entities.
Gupta allegedly used misused corporate funds for his own benefit, including:
- over $3 million of personal jet travel for himself and his family and friends to destinations such as South Africa, Italy, and Cancun;
- $2.8 million of costs associated with Gupta’s yacht;
- $1.3 million of personal credit card expenses; and
- costs associated with 28 club memberships, 20 automobiles, homes around the country, and premiums for three personal life insurance policies.
The Commission also alleges that Raval failed to respond appropriately to various red flags concerning Gupta’s expenses and certain’s related party transactions, and that the former CFOs, Das and Dean, allowed Gupta to support his lavish lifestyle by rubber-stamping hundreds of Gupta’s expense reimbursement requests.
Gupta and Raval have agreed to settle the cases. Gupta consented to pay disgorgement of $4,045,000, prejudgment interest of $1,145,400, and a $2,240,700 civil money penalty. He will also be barred from serving as an officer or director of a public company.
Raval agreed to a $50,000 civil money penalty, and to a five-year bar on serving as an officer or director of a public company. The case against Das and Dean is ongoing.
