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Bisys settles suit by shareholders(Columbus Dispatch (Ohio) (KRT) Via Thomson Dialog NewsEdge) Oct. 21--The Bisys Group, a provider of accounting and recordkeeping services to financial institutions and insurance companies, has agreed to pay $66.5 million to settle a classaction lawsuit filed by shareholders. The company, based in Roseland, N.J., employs 900 people in Columbus. The lawsuit said Bisys violated securities law by issuing misleading financial information to investors from 2000 to 2004, and failing to use acceptable accounting practices that led to the restatement of company earnings in 2005 and 2006. Former CEOs Lynn Magnum and Russell Fradin, former CFO James Fox, and former Bisys attorney Kevin Dell also were named as defendants in the case. The settlement "will impact the company's earnings," but it's not yet clear when, company spokeswoman Amy Conti said. Part of the money will come from the company's $25 million liability-insurance policy for directors and officers. The company's 5,000 workers nationwide will not be affected, officials said. The $66.5 million figure is higher than the average shareholder class-action lawsuit settlement, according to New York-based NERA Economic Consulting. Last year, the average settlement was $24.3 million. That didn't include high-profile suits such as Enron and WorldCom, which settled for $7.1 billion and $6.2 billion, respectively. This is the second settlement Bisys has reached in the past two months. In September, the U.S. Securities and Exchange Commission fined its subsidiary, Bisys Fund Services Inc., $21.4 million for entering into secret side deals with 27 mutual-fund advisers. The company allegedly used $230 million in shareholder money to pay mutual-fund advisers' marketing expenses. The money should have come from the advisers' own assets. "Our settlement seeks to punish Bisys for its misconduct and to provide monies to compensate the mutual funds for their losses," Randall R. Lee, director of the SEC's Los Angeles office, said in a statement. The fine is in line with similar cases. In 2005, Citigroup Global Markets Inc. paid a $20 million fine after the SEC investigated its mutual-fund marketing practices. The fine will not affect Bisys earnings, Conti said, because a reserve fund had been set aside to pay it. Both settlements are in the best interest of the company and the shareholders, said Robert Casale, Bisys interim CEO and chairman. They represent "a significant step forward in putting the company's (past) financial reporting issues ... behind us." Bisys admitted to no wrongdoing in either case. [email protected] Copyright (c) 2006, The Columbus Dispatch, Ohio Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |