Self-made multimillionaire, philanthropist, successful author — glowing praise seems to be the norm when people talk and write about Robert O. Carr. Among them is self-help guru Tony Robbins, who praised Carr’s “integrity and guts” in a YouTube video lauding one of Carr’s books.

To Carr’s former company, the one he sold for $4 billion a few years ago, he is something else entirely: a stock swindler.

A federal lawsuit filed this week accuses Carr, the founder and former CEO of credit card processing company Heartland Payment Systems, of providing inside information — along with about $1 million — to his girlfriend, Kathie Hanratty, to purchase Heartland stock ahead of the company’s acquisition by Global Payment Inc.

“At Carr’s instruction, Hanratty purchased HPS’ stock for roughly $79 per share (before the acquisition was announced publicly) and sold it only a few months later (after the acquisition was announced) for roughly $101 per share: a more than 25% gain,” the lawsuit alleges.

Hanratty also is named in the lawsuit, which contains contents of several emails the company claims are proof the pair schemed to use Carr’s inside information to make a quick profit on the stock. The $4.3 billion sale was completed in 2016.

An attorney representing Carr called the suit a “smear campaign” and said it misrepresents the facts surrounding Carr’s stock transactions. Hanratty didn’t immediately return a phone message left Friday at her office in Connecticut.

Carr founded Heartland in Princeton, New Jersey in the late 1990s and grew it into one of the country’s largest payment processing companies. Along the way, he formed a foundation that paid college tuition for hundreds of economically disadvantaged students. He also wrote a book about his journey from a working-class upbringing to millionaire entrepreneur.

He was named in a 2009 lawsuit by shareholders who alleged Heartland illegally withheld details of a massive data breach that occurred in 2007 but wasn’t fully revealed until 2009, causing a steep drop in the company’s stock price. The suit ultimately was dismissed.

In the current lawsuit, Carr is alleged to have met with representatives from Global in early November 2015 and learned the company planned to offer $97.50 per share for Heartland stock — a fact he allegedly passed on to Hanratty the same day. About a week later, the suit claims, he sent a check to Hanratty to purchase the stock. It would be roughly three weeks before rumors of Global’s offer began appearing in news reports and four weeks before the companies announced the offer.

Instead of using jargon or euphemisms, the emails between the two make no effort to obscure the actions taken.

“I went to the bank today and privately made the deposit (big gulp OMG) with the branch manager in her office,” Hanratty writes. “Arrangements are made to purchase the HPV stock as soon as the out of state check clears.”

The suit alleges breach of fiduciary duty and aiding and abetting, and it seeks the repayment of proceeds from the stock transaction as well as “any and all monetary relief to which it is entitled.” It also alleges Carr violated a non-compete agreement by starting Beyond, a Princeton-based company that “directly competes” with Heartland, less than a year after his departure.

Michael McGovern, an attorney representing Carr, said Friday that Carr received prior authorization from Heartland’s legal counsel for his stock transactions and that the lawsuit is “a smear campaign and an anti-competitive initiative thinly disguised as a lawsuit.”

“What Global characterizes as a ‘scheme’ by Bob Carr to profit illegally, was in fact a planned sale of Heartland stock, ahead of the Global acquisition, that resulted in a significant tax liability that exceeded the profit from Ms. Hanratty’s lawful investment,” McGovern wrote in an email.

McGovern confirmed that federal investigators are looking into the stock transactions but said Carr is cooperating and “is confident that the facts will confirm that he acted appropriately.”


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