According to the Order and Final Judgment, entered on April 14, 2006, and signed by U.S. District John W. Sedwick, the Stipulation and Settlement is approved as fair and the Action is dismissed with prejudice. Further, the Plan of Allocation is approved as fair and reasonable, and the Plaintiffs’ Counsel are awarded 25% of the Gross Settlement Fund in fees and $39,093.26 in reimbursement of expenses.

As reported to the Company’s FORM 10-Q for the quarterly period ended September 30, 2005, the Company, its former chief executive and two of its former chief financial officers were defendants in a federal securities action (the Federal Securities Action) that was pending in the U.S. District Court for the District of Arizona. The Consolidated Amended Complaint (Complaint) filed in this Action alleged, among other things, that during the period from July 21, 2000 through October 24, 2002 the defendants made false and misleading statements and omissions of material facts and that the plaintiff and other members of a putative class of shareholders suffered damages as a result. This Complaint was dismissed by order of the District Court in July 2004. The plaintiffs appealed this order of dismissal to the Ninth Circuit Court of Appeals in August 2004. At the request of the parties, the Appellate Court vacated the original briefing schedule of this appeal and the Court has not established a new briefing schedule. The plaintiffs and the defendants in this action have reached a tentative settlement of this matter under which the defendants would pay the purported class $2.55 million. The tentative settlement is subject to initial documentation, confirmatory discovery, final documentation and approval by the Court. Assuming that this settlement is ultimately consummated by the parties and approved by the District Court, the Company expects that its insurance will cover the entire settlement amount.

According to an earlier SEC filing, specifically the Company's FORM 10-Q for the quarterly period ended September 30, 2003, in September 2003, the Wisconsin Federal Court appointed a lead plaintiff and lead counsel in the Federal Securities Actions, consolidated the three actions and granted defendants’ motion to transfer the actions to the U.S. District Court for the District of Arizona (the Arizona Federal Court). The lead plaintiff is expected to file an amended consolidated complaint in the Arizona Federal Court and the defendants intend to move to dismiss that complaint on various grounds.

The original complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 2, 2001 to October 24, 2002. For example, according to the complaint, throughout the Class Period, eFunds issued press releases announcing quarter after quarter of record results of operations, with revenues and earnings doubling in several quarters during the Class Period. The financial statements contained in such press releases were repeated in quarterly and annual reports filed with the SEC. According to the complaint, such statements were materially false and misleading because they failed to disclose that eFunds had been improperly recognizing revenue during the Class Period. Specifically, according to the complaint, the Company recognized revenues on certain contracts immediately which, according to generally accepted accounting principles, should have been deferred over a period of time. Accordingly, the complaint alleges, eFunds materially inflated its revenues and revenue growth rate throughout the Class Period. On March 4, 2002, eFunds issued a press release announcing that it was 'revising its previously announced results of operations for the year ended December 31, 2001' because the Company had recognized revenue from two transactions in the second quarter of 2001 which should have been recorded in the third quarter as a single transaction, or, in the alternative, as a reduction in operating expenses instead of revenue. The revision required a reduction of the Company's reported 2001 revenue by $5 million. According to the complaint, that announcement, however, did not disclose the truth regarding the Company's improper revenue recognition. On October 25, 2002, before the open of trading, eFunds shocked the market by announcing that it would "delay the release of its earnings for the quarter ended September 30, 2002, while the Company completes a review of the accounting treatment given to various transactions that occurred in 2000 and 2001 and certain tax matters related to the Company's India based operations." In response to the announcement, the price of eFunds common stock fell by 10% in one day, from a close of $9.65 per share on October 24, 2002 to close at $8.68 per share on October 25, 2002, on unusually large trading volume, and representing a decline of 66% from the Class Period high of $25.49 per share reached on May 18, 2001.