In a press release, the company stated that the Board of Directors hascommenced an investigationintothe certain fundservicesarrangements. Under investigation by the Securities and Exchange Commission (SEC) arecertainarrangements underwhichBISYS “agreedwiththeadvisersofcertainUSmutual fundstouse a portionofthefeespaidto[BISYS]bythemutualfundtopayfor,amongotherthings,expensesrelatingtothe marketing anddistributionofthefund shares,tomakepayments tocertainadvisers, andtopayforcertainotherexpenses,” according to the news release.
The Board investigation will attempt to be completed by May 10; however, if this is not possible, the company has said that it may not be in a position to file its third quarter Form 10-Q. The SEC will be informed of the findings of the Board, according to the announcement.
The company entered into such agreements before December, 2003, according to the announcement, and has notified the SEC of them. Under the external investigation, BISYS is continuing tocooperateintheSEC probe byprovidinginformationand documentsandmaking employeesavailableforinterviews andtestimony, the company said.
The company has also adopted reforms, it said. According to the announcement, BISYS has:
- terminated or is intheprocess of terminatingthearrangementswithmutual fund a dvisors.
- created a special committeeof theBoardtoassess appropriate personnelactions.
- implemented revised procedures regardingdistribution and administrationarrangements with its mutual fund clients.
- commenced enhanced trainingprogramsforrelevantpersonnel.