- Management Announces Corrective Actions -
NEW YORK, April 19 /PRNewswire-FirstCall/ -- As previously disclosed, the
Securities and Exchange Commission (the "SEC") is investigating certain
practices in the Company's mutual fund services business. The Company
believes that the SEC's investigation relates to the structure and accounting
for certain arrangements pursuant to which the Company agreed with the
advisers of certain U.S. mutual funds to use a portion of the fees paid to the
Company by the mutual fund to pay for, among other things, expenses relating
to the marketing and distribution of the fund shares, to make payments to
certain advisers, and to pay for certain other expenses. The Company has
identified to the SEC a number of such arrangements, all of which were entered
into prior to December 2003 and have since been terminated or are in the
process of being terminated. The Company is continuing to cooperate in the
SEC's investigation, including by providing information and documents and
making employees available for interviews and/or testimony. The Company has
retained the law firm of Wilmer Cutler Pickering Hale and Dorr LLP to perform
a review of the matters being investigated by the SEC, to assist the Company
in responding to the information requests and subpoenas issued by the SEC, and
to represent the Company before the SEC.
In addition, the Audit Committee of the Company's Board of Directors has
commenced an investigation into the facts and circumstances surrounding the
funds services arrangements described above, along with any additional
relevant matters which may come to its attention in the course of the
investigation, and has retained the law firm of Paul, Weiss, Rifkind, Wharton
& Garrison LLP to assist in this investigation. The Audit Committee will
attempt to complete the investigation promptly. In the event the
investigation is not completed prior to the May 10, 2005 due date for its 3rd
quarter Form 10-Q, the Company may not be in a position to file its 3rd
quarter Form 10-Q by such time.
Russ Fradin, BISYS' President and CEO, said, "As I have stated before, we
take matters of this type very seriously. We will continue to aggressively
address the issues raised by the investigations, with the dual objectives of
complete cooperation with the regulatory authorities and the proactive
implementation of appropriate procedures to address any issues identified."
While the reviews are continuing, the Board of Directors and the Company's
current senior management are addressing these matters in the following
manner:
* The Company has terminated or is in the process of terminating the
arrangements with mutual fund advisers described above;
* A special committee of the Board has been appointed to assess
appropriate personnel actions;
* The Company is implementing revised procedures regarding distribution
and administration arrangements with its mutual fund clients;
* The Company has commenced enhanced training programs for relevant
personnel; and
* The Company has kept and will continue to keep the SEC fully informed
concerning the status of its internal reviews.
The Company will implement additional measures as appropriate.
In addition, as previously disclosed, the SEC is also investigating the
facts and circumstances related to the restatement of the Company's prior
period financial results which the Company completed in August 2004. The
Company is continuing to cooperate in the investigation, including by
providing information and documents and making employees available for
interviews and/or testimony. The Company understands that representatives of
the United States Attorney's Office for the Southern District of New York have
attended interviews that have taken place. The Company has retained the law
firm of Skadden, Arps, Slate, Meagher & Flom LLP to assist the Company in
responding to the information requests and subpoenas issued by the SEC and to
represent the Company in this matter.
At this time, the Company cannot predict the results of the SEC
investigations. If the SEC determines that the Company, its current or former
employees, officers or directors have violated the federal securities laws or
the SEC's rules and regulations, the Company could be subject to SEC
enforcement actions, including potential fines and penalties, which could have
a material adverse effect on the Company's results of operations or financial
condition. A significant portion of the increase in the Company's general and
administrative expenses over the nine months ended March 31, 2005, is
attributable to fees and expenses associated with cooperating with these
investigations. The Company expects these increased expenditures to continue
as the SEC's investigations proceed.
The Company is currently planning to host its quarterly webcast and
conference call at 8:30AM EDT on Wednesday, April 27, 2005.
About BISYS
The BISYS Group, Inc. (NYSE: BSG) provides outsourcing solutions that
enable investment firms, insurance companies, and banks to more efficiently
serve their customers, grow their businesses, and respond to evolving
regulatory requirements. Its Investment Services group provides
administration and distribution services for mutual funds, hedge funds,
private equity funds, retirement plans and other investment products. Through
its Insurance Services group, BISYS is the nation's largest independent
wholesale distributor of life insurance and a leading independent wholesale
distributor of commercial property/casualty insurance, long-term care,
disability, and annuity products. BISYS' Information Services group provides
industry-leading information processing, imaging, and back-office services to
banks, insurance companies and corporate clients. Headquartered in New York,
BISYS generates more than $1 billion in annual revenues worldwide. Additional
information is available at http://www.bisys.com.
Except for the historical information contained herein, the matters
discussed in the press release are forward-looking statements within the
meaning of the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including
but not limited to economic, competitive, governmental and technological
factors affecting the Company's operations, markets, services and related
products, prices and other factors discussed in the Company's periodic filings
with the Securities and Exchange Commission.
SOURCE The BISYS Group, Inc.
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http://www.bisys.com
Company News On-Call:
http://www.prnewswire.com/comp/851938.html
CONTACT:
Daniel Briggs, Vice President, Finance and
Investor Relations of The BISYS Group, Inc., +1-212-907-6134
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