SEC Charges Former CEO of OTC Penny Stock Company with Fraud
Last Wednesday, the SEC filed fraud charges against Adesh Kumar Tyagi, the former CEO, sole director, and majority shareholder of Systems America, Inc., subsequently renamed Cloudeeva, Inc.
The SEC alleges that Tyagi falsely 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 when, in fact, 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 an Initial Disclosure he published on behalf of Systems American on July 2, 2010 that he was not a party to any material litigation. In Annual Reports he published on behalf of Systems America on February 24, 2011 and July 24, 2012, Tyagi claimed that no officer or director of the company had been named as a defendant in a criminal proceeding, when he had been named as a defendant in two pending criminal proceedings at the time of each publication.
The complaint also alleges that Tyagi placed buy limit orders in small increments during individual trading days and marked the close on at least 16 trade dates in order to artificially inflate the share price and trading volume of the company’s securities.
Finally, the complaint alleges that Tyagi failed to file with the SEC required disclosures of his holdings and transactions in company securities.
Systems America, Inc. was quoted on the OTC Markets under the ticker symbols “SMAR” and “SYAI.”
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