Infogroup founder Gupta hit with $7.4 million in penalties

By Published on .

Washington, D.C.—Vinod Gupta, founder and former CEO of database marketing company Infogroup, will pay fines totaling $7.4 million stemming from Securities and Exchange Commission charges that he siphoned off millions of dollars from the company to finance a lavish lifestyle.

The SEC investigation, which began in 2007, concluded that Gupta improperly accessed company funds to pay for $3 million worth of international air travel, maintain an 80-foot yacht for $2.8 million, pay $1.3 million in credit card bills, and buy 20 cars and multiple homes.

Gupta has also been barred from serving as an officer or director of a public company.

In 2008 Gupta was ousted as the company’s chairman-CEO following the settlement of shareholder lawsuits over the financial irregularities.

Earlier this month, Infogroup, the market leader in the highly fragmented database and list management industry, announced it had agreed to be acquired by private equity firm CCMP Capital Partners for about $460 million, or $8 a share, and be taken private. Gupta, who resigned from the Infogroup board following the announcement, remains the company’s largest shareholder, with about 21.4 million shares.

The SEC criticized the company for allowing Gupta’s practices. In a statement, SEC Enforcement Director Robert Khuzami said, “Other corporate officers also abused their positions of trust by looking the other way instead of standing up for investors and bringing the scheme to a halt.”

The former chairman of Infogroup’s audit committee, Vasant H. Ravel, will pay a fine of $50,000 for failing to exercise oversight of Gupta’s expenses and has agreed not to serve as an officer or director of a public company for five years.

Most Popular
In this article: