It’s the ultimate football fantasy: This pipsqueak who dreams of playing football for Notre Dame his entire life works his way into a walk-on spot on the team, plays for like thirty seconds, and is carried off the field. The vision of this becomes the centerpiece of one of the most iconic sports films in the history of the genre . And then, decades later, the man the film was based on gets indicted by the SEC for a pump-and-dump scheme that netted almost $11M in profits for a sports drink attempting to capitalize on the legend’s fame.

Well, maybe not that last part. Which just happened.

Sports fans, Fightin’ Irish alum, and Touchdown Jesus, pay attention:

Your chosen son just got busted by the feds.

For a pump-and-dump scheme.

Involving a sports drink exploiting Rudy’s fame.

In Las Vegas.

Just like the rest of Rudy’s story, even Hollywood can’t make this kind of thing up. Yes, that’s the SEC writing about the movie Rudy in their release:

The Securities and Exchange Commission today charged Daniel Ruettiger and 12 other participants in a scheme to deceive investors into buying stock in his sports drink company. Ruettiger is widely known for having inspired the 1993 motion picture “Rudy.” According to the SEC’s complaint filed in federal court in Las Vegas, Ruettiger founded Rudy Nutrition to compete with Gatorade in the sports drink market. Rudy Nutrition produced and sold modest amounts of a sports drink called “Rudy” with the tagline “Dream Big! Never Quit!” However, the company primarily served as a vehicle for a pump-and-dump scheme that occurred in 2008 and generated more than $11 million in illicit profits.

Dream big! Never quit! indeed.

It’s worth noting that the odds of Rudy’s startup sports drink competing with Gatorade likely make Rudy’s chances of ever playing for Notre Dame look like less of a long-shot than a shoo-in in comparison.

It’s also worth noting that a pump-and-dump scheme, for those who don’t know, is not something that comes out of the shotgun formation. It’s when you, a financial criminal, overhype a product, artificially inflating market demand for said product, and then leave when the artificial demand hyper-inflates the value of a given commodity, getting out with the money and leaving the people who were conned into thinking there was value there holding the losses (or as they say in the finance sector, ‘holding one’s sexual reproductive organs in one’s hands’). It’s getting other people to buy high and sell low, which is the opposite of what you’re supposed to do.

What the SEC is accusing Rudy and his business partner—the not-at-all shady sounding Rocky Brandonisio—of doing is making Rudy Beverage a publicly traded company, and then:

(1) Bringing in an experienced penny stock promoter to help orchestrate the company going public, as well as the inflation of the hype behind the beverage company.

(2) And then finding other sketchy guys to help out with this, or in the SEC’s words, “partnering with other penny stock promoters to inflate the price and volume artificially through fraudulent touting and manipulative trading,” which involved

(3) “a series of false or misleading statements about RUNU to the public in mailers sent to millions of U.S. investors, messages posted in Internet chat rooms dedicated to penny stocks, and videos placed on the Internet for public viewing” as well as false statements made in press releases and SEC filings.

Guess what! It’s illegal to lie to the SEC about your publicly traded company. Flag on the field! And how well did Rudy perform with his short time on the market?

In less than a month, RUNU went from trading 720 shares to more than 3 million shares, and within two weeks the price of RUNU stock climbed from 25 cents to $1.05 per share. After March 12, 2008, RUNU stock began a roller coaster ride as the scheme’s participants sold millions of RUNU shares to the market amid their simultaneous efforts to pump the stock.

Realize, that’s over a 300% increase in value over two weeks. Think there might be something wrong there? The SEC did. And guess what happened to Rudy? He got tackled:

Ruettiger agreed to pay $382,866 in settling the charges, and other participants consented to final judgments also ordering disgorgement, prejudgment interest, and financial penalties.

But your hero couldn’t even do public disgrace well:

Ruettiger and 10 of the scheme’s other participants have agreed to settle the SEC’s charges without admitting or denying the allegations. The settlements, which are subject to court approval, impose penny stock bars and officer-and-director bars as appropriate.

That said, there were twelve other participants in the scheme, which sounds like just enough people to carry Rudy out of federal court on their shoulders for not having to completely confess to being totally shady stock manipulators. Not that his entire legacy wasn’t a totally overblown Notre Dame thing to begin with. ‘Knew that Napoleon Complex would catch up with him eventually.

fkamer@observer.com | @weareyourfek