Bisys to Pay $25 Million SEC Fine, Pre-Citi Takeover

NEW YORK – BISYS Group Inc. , which is in the process of being acquired by Citigroup, has agreed to pay $25 million to settle charges that the company violated financial reporting and internal controls provisions of the securities laws, the Securities and Exchange Commission said yesterday. The SEC charged that, from July 2000 through December 2003, former BISYS officers and employees engaged in a variety of improper accounting practices that resulted in overstatement of the company's reported financial results for the fiscal years ended June 30, 2001, 2002, and 2003 by roughly $180 million. Bisys agreed to settle shareholder lawsuits over the same charges last October by paying shareholders $66 million. And last September, the company agreed to pay $21 million to settle separate SEC charges that it made illegal kickbacks to brokers that were recommending its mutual funds to customers. Bisys has agreed to be acquired for $12 a share, or $1.45 billion, by Citigroup, which will then sell the Bisys Insurance Services Group and Retirement Services to J.C. Flowers, a private equity fund that is acquiring Sallie Mae.