Daniel Ruettiger, the former walk-on football player at the University of Notre Dame who was the inspiration for the 1993 movie "Rudy", settled a complaint today with the U.S. Securities and Exchange Commission (SEC).
While the movie "Rudy" portrayed Ruettiger as an inspirational character that overcame much adversity, his recent post-college activities are not so complimentary.
The SEC complaint dated Dec. 16, 2011 and filed in Las Vegas, Nev., states Ruettiger, along with 12 other individuals, generated more than $11 million in illicit profits through fraudulent methods using a sports-drink company.
SEC claimed the group "touted fake taste tests and sales" for Ruettiger's Nevada-based sports-drink business, reported Bloomberg's Business Week.
A classic pump-and-dump scheme of penny stock is what the SEC said Rudy Nutrition (traded under symbol RUNU) was all about. The sports-drink product was marketed to compete against the popular Gatorade.
The government agency alleged the group did produce, market and sell the product in "modest quantities", but it was primarily used as a means to defraud investors between February and September 2008.
"The company sent promotional press releases falsely claiming that Rudy Nutrition outsold sports-drink Gatorade by 2 to 1 in the Southwest and outperformed Gatorade and Powerade in several blind taste tests," according to a press release issued by the SEC which outlined the complaint.
In addition, the SEC claimed the defendants also "artificially inflated" the price of Rudy Nutrition stock, selling unregistered shares to investors. The complaint claims this occurred at a time the company was performing poorly and had few customers and assets, and was not a profitable business. Engaging the aid of a penny stock promoter, the fraud was initiated. Once the scheme was orchestrated, the SEC said "In less than a month, RUNU went from trading 720 shares to more than 3 million shares."
“Investors were lured into the scheme by Mr. Ruettiger's well-known, feel-good story but found themselves in a situation that did not have a happy ending,” said Scott W. Friestad, Associate Director of the SEC’s Division of Enforcement. “The tall tales in this elaborate scheme included phony taste tests and other false information that was used to convince investors they were investing in something special.”
Ten of the 12 defendants have settled with the SEC in regards to this scheme, two more have yet to do so, and the SEC says litigation against those two individuals continues.
Dream Big! Never Quit!” was the marketing slogan used for the now defunct sports drink.
Looks like for Ruettiger, the time to quit had arrived. Rudy Nutrition is no longer an operating business; the SEC suspended trading and revoked registration of the stock back in 2008.
Footage of the 1975 Notre Dame vs. Georgia Tech game, the only one Ruettiger would ever make it to the field in.
The 1993 interpretation of those final moments of this game