An Indian-origin former CEO of an IT company, aged 49, had been charged with the fraud in United States for allegedly misappropriating the facts that his company had supported customer operations in nearly 20 countries, which include India.
Adesh Kumar Tyagi, is of California, the former CEO, sole director, and also a majority shareholder of the Systems America, which was subsequently renamed as Cloudeeva.
The US federal regulator Securities and Exchange Commission's (SEC) has filed a complaint in the US District Court for the Northern District of California on 31st May, which stated that, Tyagi has falsely stated in a press releases that he issued notice between the July 2010 and September 2011 that his company had hundreds of customers and also supported customer operations in nearly 20 countries.
Systems America also said that, it provided services to the Fortune 500 clients and also had operations in India as well as the United States.
However, the company had only two main clients in the year 2010 and also did not have supported customer operations in any foreign countries in the years 2010 and 2011.
Tyagi has also allegedly claimed in the initial disclosure that he had published on behalf of the company in the July 2010 that he was not a party to any kind of material litigation.
In the annual reports Tyagi published on behalf of the Systems America, in which he claimed that no officer or the director of company had been named as the defendant in any criminal proceeding, when he had been named as the defendant in two pending criminal proceedings at the time of each publication.
The complaint has also alleged that Tyagi failed to file with the SEC all the required disclosures of his holdings and also transactions in the company securities.
Complaint seeks the permanent injunctions, an injunction, which prohibits Tyagi from participating in the transactions of any security of an entity in which he is an officer, director, owner, significant shareholder, or the control person, disgorgement of the ill-gotten gains plus pre-judgment interest, penalties, and also officer-and-director and the penny stock bars.
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