UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 15895 / September 23, 1998 SECURITIES AND EXCHANGE COMMISSION v. ONE OR MORE UNKNOWN PURCHASERS OF CALL OPTIONS AND COMMON STOCK OF USCS INTERNATIONAL, INC., No. 98-Civ-6327 (S.D.N.Y.) UNKNOWN PURCHASERS OF SECURITIES OF USCS INTERNATIONAL FAIL TO APPEAR AT HEARING; ASSETS TO REMAIN FROZEN On September 17, 1998, the Honorable Leonard B. Sand of the U.S. District Court for the Southern District of New York entered a Preliminary Injunction against one or more unknown purchasers of call options and common stock of USCS International, Inc. The Preliminary Injunction supersedes the Court's Temporary Restraining Order, which had temporarily frozen more than $1.9 million in funds involved in an alleged insider trading scheme. The funds consist of more than $1.6 million that the one or more unknown purchasers used to purchase the USCS common stock, as well as more than $300,000 in profits from the sales of the stock. The unknown defendants did not oppose the Commission's application for a Preliminary Injunction and failed to show for the Court's hearing on the matter. The Commission initially had sought and obtained a Temporary Restraining Order that froze the $1.9 million in assets and granted other emergency relief. See Lit. Rel. No. 15875 (September 9, 1998). The Commission's complaint alleged that the unknown purchasers had engaged in illegal insider trading in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5. According to the complaint, one or more unknown persons had purchased 200 USCS call options and 61,800 shares of USCS common stock just hours before the announcement on September 2, 1998, that DST Systems, Inc. intended to merge with USCS. The complaint further alleged that the defendants had hidden their identities by trading through a Swiss bank.