U. S. Securities and Exchange Commission
SEC Obtains Fraud Judgment Against Former Executive of Healthcare Advertising Company
Litigation Release No. 24735 / February 11, 2020
Securities and Exchange Commission v. Rishi Shah, Shradha Agarwal, Brad Purdy and Ashik Desai, 19-cv-07528 (N.D. Ill. filed November 25, 2019)
On February 6, 2020, the Securities and Exchange Commission obtained a partial consent judgment against defendant Ashik Desai, a former executive of Outcome Health, who was charged with fraud in connection with raising nearly half a billion dollars from unsuspecting investors.
The SEC's amended complaint alleges that Desai, of Pennsylvania, and three other executives engaged in a fraudulent scheme in which they falsely portrayed Outcome Health as an overwhelming success to investors, clients, and auditors. As part of this scheme, Outcome Health allegedly overstated its revenue in its audited financial statements for 2015 and 2016 by millions of dollars while raising approximately $487 million from investors, who relied on the false financial statements and false representations about the company's growth. The amended complaint charges Desai and the three other Outcome Health executives with violating, as well as aiding and abetting the company's violations, of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Act of 1934 and Rule 10b-5 thereunder.
Desai consented to the entry of a judgment that permanently enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b)(5) of the Exchange Act and Rule 10b-5 thereunder. The judgment further provides that the amount of any civil monetary penalty will be determined by the court at a later date upon motion of the SEC.
The SEC's action against the other remaining defendants continues.
For additional information, see Press Release No. 2019-241, November 25, 2019.