Washington, D.C., June 9, 2005 – LAWFUEL – The Law News Network – Roys Poyiadjis, a former CEO of AremisSoft Corporation, which was a software company with offices in New Jersey, London, Cyprus, and India, agreed to final resolution of fraud charges brought against him by the Securities and Exchange Commission in October 2001. In documents filed with the federal district court in Manhattan, Poyiadjis consented to disgorge approximately $200 million of unlawful profit from his trading in AremisSoft stock — among the largest recoveries the SEC has obtained from an individual.
The disgorged funds are to be distributed to defrauded investors pursuant to a distribution plan for beneficiaries of the AremisSoft post-bankruptcy estate. Poyiadjis also agreed to a final judgment permanently enjoining him from future violations of the antifraud, reporting, and other provisions of the federal securities laws and prohibiting him from ever acting as an officer or director of a public company. Poyiadjis consented without admitting or denying the allegations in the SEC’s complaint.
“As this case demonstrates, the SEC will vigorously prosecute illegal conduct both home and abroad that affects U.S. securities markets, will pursue the proceeds from such misconduct, and will enlist foreign authorities in its efforts to do so,” said Paul R. Berger, Associate Director of Enforcement at the SEC.
The SEC’s complaint charged that AremisSoft, its co-chairmen and co-CEOs Poyiadjis and Lycourgos Kyprianou, made fraudulent statements in public filings and press releases, including:
1) reporting in AremisSoft’s 2000 financial statements millions of dollars in sales to entities that either did not exist as operating businesses or did not purchase product from AremisSoft;
2) reporting in AremisSoft’s 1999 and 2000 financial statements that the company paid a total of $32.7 million to acquire three software companies, when in fact the actual purchase prices paid ranged from approximately $100,000 to $300,000; and
3) misrepresenting the value of and revenue earned from a contract with Bulgaria’s Health Insurance Fund in press releases and public filings.
The complaint further alleged that Poyiadjis and Kyprianou, acting through offshore entities, engaged in massive insider trading during the period of the fraud, selling millions of shares of AremisSoft stock.
The SEC acknowledges the assistance of the Attorney General of the Isle of Man.