On September 21, 2007, a shareholder filed a Notice of Appeal from the Court's Memorandum Order, entered, on July 16, 2007, approving the class action settlement and an award of attorney's fees to Class Counsel, and from the Final Judgment entered on August 22, 2007.
On August 22, 2007, the Court entered the Final Judgment dismissing the case as settled and closing the case. On August 31, 2007, the Lead Plaintiffs filed a Notice of Appeal. According to the Notice, the plaintiff class appeal the final judgment entered as to Defendant PricewaterhouseCoopers on August 22, 2007. Specifically, Lead Plaintiffs appeal from the Memorandum Order signed on August 1, 2007, and entered August 3, 2007, denying their Motion for Leave to Amend the Second Consolidated Amended Complaint.
According to an article dated August 6, 2007, a judge has upheld the dismissal of securities fraud claims against auditors PricewaterhouseCoopers LLP by shareholders of investment firm Bisys Group Inc., denying the plaintiffs' bid for what he called a “second bite of the apple.” Manhattan federal court judge Jed Rakoff ruled the shareholders, who this year reached a $65 million class action settlement with Bisys, could not reinstate claims against former co-defendant PwC 18 months after the firm was struck from the case with prejudice.
On October 23, 2006, a Second Consolidated Amended Complaint was filed. On November 7, 2006, an Amendment Stipulation and Agreement of Settlement was filed. That day, the Court entered the Order preliminarily approving the settlement. On July 16, 2007, the Court entered the Memorandum and Order approving the settlement and the plan of allocation. According to the Order, Counsel is awarded attorneys' fees in the amount of 30% of the settlement amount, i.e., $19,762,500 plus a corresponding share of interest accrued, and litigation expenses in the amount of $516,686.69.
According to a press release dated October 16, 2006, The BISYS Group, Inc. (NYSE:BSG), a leading provider of outsourcing solutions for the financial services sector, announced that it has reached an agreement in principle with the lead plaintiffs to settle the securities class action lawsuit entitled "In re BISYS Securities Litigation" File No. 04-CV-3840 and a related securities action pending against it and certain of its former officers and directors in the United States District Court for the Southern District of New York. The proposed settlement involves claims relating to the Company's financial disclosures, including allegations concerning its financial restatements filed in 2005 and 2006, and is conditioned upon successful negotiation of definitive documentation and approval by the Court. Under the proposed settlement, BISYS will pay an aggregate of $66.5 million in cash into an escrow account within 10 days after preliminary Court approval. The settlement, which includes no admission of wrongdoing by BISYS or any of the individual defendants, will be funded through a combination of cash on hand, BISYS's existing credit facility and available insurance proceeds under its $25 million directors and officers liability policy. BISYS is currently in discussions with its insurance carriers to determine the final amount of available insurance proceeds.
As previously disclosed by the Company’s FORM 10-Q for the quarterly period ended March 31, 2006, following the Company’s May 17, 2004 announcement regarding the restatement of its financial results for the years ended June 30, 2003, 2002 and 2001 and for the quarters ended December 31 and September 30, 2003 (the “2004 restatement”), seven putative class action and two derivative lawsuits were filed against the Company and certain of its current and former officers in the United States District Court for the Southern District of New York. By order of the Court, all but one of the putative class actions have been consolidated into a single action, and on October 25, 2004, plaintiffs filed a consolidated amended complaint. The complaint purports to be brought on behalf of all shareholders who purchased the Company’s securities between October 23, 2000 and May 17, 2004 and generally asserts that the Company, certain of its officers and its independent registered public accounting firm allegedly violated the federal securities laws in connection with the purported issuance of false and misleading information concerning the Company’s financial condition. The complaint seeks damages in an unspecified amount as well as unspecified equitable/injunctive relief. On December 23, 2004, the Company, the individual defendants and the Company’s independent registered public accounting firm filed separate motions to dismiss the complaint. On October 28, 2005, the Court dismissed certain claims under the Securities Exchange Act of 1934 as to six of the individual defendants, narrowed certain additional claims against the Company and the individual defendants, and dismissed all claims as to the Company’s independent registered public accounting firm. The Court denied the motions to dismiss in all other respects. The Court granted leave for plaintiffs to file on or before November 14, 2005, an amended complaint addressing the scienter of the individual defendants and the independent registered public accounting firm. The remaining putative class action purports to be brought on behalf of all persons who acquired BISYS securities from the Company as part of private equity transactions during the period October 23, 2000 to May 17, 2004. The complaint generally asserts that the Company and certain of its officers allegedly violated the federal securities laws in connection with the purported issuance of false and misleading information concerning the Company’s financial condition, and seeks damages in an unspecified amount. On November 29, 2004, plaintiffs filed an amended complaint. By order of the Court, the amended complaint was consolidated into the above complaint. By report and recommendation dated August 2, 2006, a United States Magistrate Judge recommended to the district court the denial of class action certification of this action. The plaintiff has filed objections seeking that the district judge not adopt the recommendation.
The original complaint charges BISYS and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. BISYS supports more than
20,000 financial institutions and corporate clients with products and services.
The complaint alleges that during the Class Period, defendants caused BISYS
shares to trade at artificially inflated levels through the issuance of false
and misleading financial statements. As a result of this inflation, BISYS was
able to raise $250 million in a convertible note offering while the individual
defendants were able to reap more than $25 million in insider trading proceeds.
On May 17, 2004, the Company issued a press release which stated that "(b)ased
upon a continuing review and analysis of commissions receivable in its Life
Insurance division, BISYS has determined that the previously reported
adjustment of $24.7 million ($15.5 million net of tax) to commissions
receivable in its Life Insurance division will be increased to approximately
$70 million to $80 million ... BISYS has also determined that the adjustment
requires a restatement of its financial results for each of the fiscal years
ended June 30, 2003, 2002 and 2001, as well as its interim results for fiscal
2004, to reflect the impact of the adjustment on each of the periods
presented." On this news, the Company's share price dropped below $13.