Litigation Release No. 19259 / June 9, 2005

Accounting and Auditing Enforcement
Release No. 2258 / June 9, 2005

Securities and Exchange Commission v. Roys Poyiadjis, Lycourgos Kyprianou et al., Civil Action No. 01 CV 8903 (S.D.N.Y.)



Roys Poyiadjis ("Poyiadjis"), a former Chief Executive Officer at AremisSoft Corporation ("AremisSoft"), which was a software company with offices in New Jersey, London Cyprus, and India, has consented to final resolution of the Commission's securities fraud charges against him brought in October 2001. Poyiadjis agreed to disgorge approximately $200 million of unlawful profit from his trading in AremisSoft stock, and to entry of a final judgment that prohibits him from acting as an officer or director of a public company. The judgment, which was entered on April 20, 2005, permanently enjoins him from future violation, or conduct giving rise to violation, of the antifraud, reporting, and other provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-13, 16a-2, and 16a-3 under that Act). The disgorged funds will be distributed to defrauded investors pursuant to a distribution plan for beneficiaries of the AremisSoft post-bankruptcy estate. Poyiadjis' consent is without admitting or denying the allegations in the Commission's complaint.

The Commission's complaint, filed in the United States District Court for the Southern District of New York on October 4, 2001, 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 release 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. Olympus Capital Investments, Inc. and Oracle Capital, Inc. were charged as relief defendants.

On October 19, 2001, the Honorable Charles S. Haight, Jr. entered a preliminary injunction against Poyiadjis, Kyprianou, and the relief defendants that, among other things, froze proceeds of their illegal AremisSoft stock sales and directed all defendants to repatriate the tainted funds to the United States. Kyprianou failed to answer the complaint or comply with the Court's order and remains a fugitive from justice.

On July 22, 2002, the Honorable Charles L. Brieant of the United States District Court for the Southern District of New York issued a Final Judgment of Permanent Injunction and Other Relief on consent against AremisSoft, prohibiting AremisSoft and its successor, Softbrands, Inc., from violating the antifraud and reporting provisions of the federal securities laws. As part of the resolution, AremisSoft consented to a Commission Order, pursuant to Exchange Act Section 12(j), revoking registration of its common stock. AremisSoft neither admitted nor denied the allegations in the Commission's complaint or the findings in the Commission's Order.

On March 15, 2002, AremisSoft filed a petition for relief under Chapter 11 of the Bankruptcy Code. On July 15, 2002, the Honorable Joel A. Pisano of the United States District Court for the District of New Jersey entered an order confirming AremisSoft's Chapter 11 Plan and authorizing AremisSoft to enter into the settlement with the Commission.

On March 22, 2002, the United States Attorney's Office for the Southern District of New York initiated a civil in rem forfeiture action in the United States District Court for that district, seeking forfeiture of funds frozen by the High Court of Justice of the Isle of Man in four bank accounts located there. The freeze order was secured by the Isle of Man Attorney General at the request of the United States Attorney General on the basis of information provided by the Commission. After the New York Court entered a default judgment in the civil forfeiture action on June 3, 2002, the Isle of Man Attorney General, again at the request of the United States Attorney General, applied to the High Court for registration of the civil forfeiture judgment, preliminary to an order repatriating the funds to the United States. On June 24, 2002 a superseding indictment issued against Poyiadjis, Kyprianou, and another former AremisSoft officer, M.C. Mathews, charging securities fraud, money laundering and conspiracy to commit securities fraud, mail fraud, wire fraud, and money laundering.

The Commission acknowledges the assistance of the Isle of Man Attorney General in this matter.