BISYS pays out $25m to settle SEC charges
Investment and insurance outsourcing provider reaches out-of-court agreement with US watchdog in relation to $180m overstatement claims
BISYS a leading US
provider of financial products and support services, has agreed to pay
approximately $25m (£12.6m) to resolve a claim brought against it by the
Securities and Exchange
Commission.
The SEC’s case alleged that between July 2000 and December 2003, former BISYS
staff ‘engaged in a variety of improper accounting practices’ which led to an
overstatement of the company’s reported financial results by almost $180m.
The practices mainly occurred in the company’s insurance services division,
where the SEC believed BISYS had recorded revenue commissions from acquired
companies that it had not officially acquired yet as its own. The company was
also charged with improperly accounting for renewal and bonus commissions and
making other improper accounting entries that overstated revenue or reduced
expenses.
Mark K. Schonfeld, director of the SEC’s New York office said, ‘This is a
case study in internal control failures under earnings pressure. The settlement
delivers meaningful relief to investors harmed by BISYS’s misconduct.’
In reaching the settlement, BISYS said: ‘The company has agreed, without
admitting or denying any wrongdoing, to refrain from future violations of the
reporting, books and records and internal control provisions of the federal
securities laws and related SEC rules’.
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