Outcome Health's former CEO Rishi Shah, former president Shradha Agarwal, and former CFO Brad Purdy were convicted on multiple counts of defrauding pharmaceutical companies and investors on Tuesday.
In late 2019, the SEC charged
the three executives with fraud after uncovering that the medical
advertising firm inflated business metrics to raise funding from
investors, overstated revenue, billed clients for ads it never ran, and
manipulated third-party studies to show improved effectiveness of
targeted medical ads.
- Three
months before the allegations emerged in 2019, the firm had nabbed
$487M in funding from investors, including Goldman Sachs, Alphabet, and
Pritzker Group, at a $5.5B valuation.
- The executives reportedly allocated $225M as dividends for Shah and Agarwal.
- Out of the almost $500M in loans availed by the company, the duo allegedly diverted $38M to themselves.
- After investors sued the firm, Shah stepped down from his post and returned $159M to the firm.
- Out
of 22, 17, and 15 wire, bank, and mail fraud charges imposed, Shah,
Agrawal, and Purdy were found guilty on 19, 15, and 13 accounts,
respectively.
