LAS VEGAS (AP) — The underdog whose Notre Dame football experience inspired the film "Rudy" is paying a settlement of more than $382,000 amid claims he and others led a stock fraud scheme involving a Las Vegas sports drink company.
Daniel "Rudy" Ruettiger and 12 others were charged Friday in federal court for creating a scheme to deceive investors into buying stock in the sports drink company Rudy Nutrition, according to the U.S. Securities and Exchange Commission. Ruettiger agreed to settle the SEC's charges without admitting or denying the allegations that he and the others grossed more than $11 million in 2008 from the alleged "pump and dump" scheme.
"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 Friestad, associate director of the SEC's Division of Enforcement, in a statement. "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."
Pump and dump schemes involve companies promoting the financial prospects of their stock to drive up a price, then "dumping" them in a move that sinks the stock's price and hurts investors.
Ruettiger did not immediately return a message seeking comment.
Investigators said Ruettiger founded Rudy Nutrition as an alternative to Gatorade and ran it out of South Bend, Ind., with a college friend. They produced and sold modest amounts of a sports drink called "Rudy." The beverage had the tagline "Dream Big! Never Quit!"
There was a promotional email claiming that in "several blind taste tests, Rudy outperformed Gatorade and Powerade by 2:1." One promotional mailer to potential investors boasted that in "a major southwest test, Rudy outsold Gatorade 2 to 1!"
Ruettiger later moved the company to Las Vegas, when he lives. He served as CEO, but the company's day-to-day operations were turned over to Rocky Brandonisio. The company struggled financially with few customers or assets, and no profits, according to the SEC.
The SEC suspended trading and later revoked registration of the stock in late 2008. Rudy Nutrition is now defunct.
The 1993 film was based on Ruettliger's football aspirations and family life.
