U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22388 / June 1, 2012
Securities and Exchange Commission v. Rajnish K. Das and Stormy L. Dean, Civ. No. 8:10CV102-LSC-FG3 (D. Neb.).
Court Enters Final Judgments, Including Indemnity Bars, Against Rajnish K. Das and Stormy L. Dean, Former CFOs of infoUSA, Inc.
The Securities and Exchange Commission announced today that on May 29, 2012, the Honorable Laurie Smith Camp, Chief United States District Judge for the District of Nebraska, entered final judgments against Rajnish K. Das and Stormy L. Dean, two former chief financial officers of infoUSA, Inc., an Omaha-based database marketing company. The court entered final judgments against Das and Dean permanently enjoining them each from violating Sections 10(b), 13(b)(5), and 14(a) of the Securities Exchange Act of 1934; Rules 10b-5, 13a-14, 13b2-1, 13b2-2, 14a-3, 14a-9 thereunder; and aiding and abetting violations of Exchange Act Sections 13(a) and 13(b)(2), and Rules 12b-20 and 13a-1 thereunder. Das was also enjoined from violating Exchange Act Rule 13a-13. The court also ordered that Das and Dean each were barred from serving as an officer and director of a public company for a period of three years from the date of the final judgments. In addition, the court ordered Das and Dean to pay civil penalties of $50,000 each, and specifically prohibited them from seeking payment, reimbursement, or indemnification from any third party for payment of the civil penalties or the cost of the bond required to stay enforcement of the civil penalties in the event of an appeal. The court also declared that Das and Dean each acted in bad faith towards the shareholders of infoUSA, Inc. and that the defendants each knew their actions were contrary to the interests of the company and its shareholders.
On March 2, 2012, after approximately two hours of deliberations, an Omaha jury found Das and Dean each liable on all claims. At trial, the Commission argued former chief executive officer Vinod Gupta used company funds to pay for his personal expenses including private jet flights, yacht expenses, private club memberships, credit card expenses, and expenses associated with his homes and cars. The Commission argued that Das and Dean each authorized the company to pay for Gupta's personal expenses and that they signed and certified Info's false public filings which underreported Gupta's executive compensation and related party transactions. In its Memorandum and Order on remedies, the court stated that "[t]he testimony and other evidence at trial clearly supported the jury's verdicts" and "[t]he wrongdoing giving rise to this action was not an isolated incident, but a continuing and systematic misuse of corporate funds and failure to abide by SEC reporting requirements for executive compensation and related party transactions. Das and Dean continue to deny wrongdoing, despite clear and compelling evidence of their misconduct." The case was prosecuted by Thomas Krysa, Gregory Kasper, and Nicholas Heinke of the Commission's Denver Regional Office.