UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16612 / June 28, 2000
SEC v. One or More Unknown Purchasers of Call Options and Common Stock of USCS International, Inc., 98 Civ 6327, S.D.N.Y.
DEADLINE FOR FILING PROOF OF CLAIM FORM BY PERSONS AND ENTITIES WHO SOLD SECURITIES AND/OR CALL OPTIONS FOR THE SECURITIES OF USCS INTERNATIONAL, INC. ON SEPTEMBER 2, 1998 IS EXTENDED TO JULY 31, 2000
In 1998, the Securities and Exchange Commission filed a civil action in United States District Court for the Southern District of New York alleging that the defendants, whose identities were unknown at the time, had engaged in illegal insider trading in securities and options for the securities of USCS International, Inc. Without admitting or denying the allegations, the defendants identified themselves and consented to the entry of Final Judgments which enjoined them from future violations of certain Federal securities laws and which ordered them to disgorge their alleged illegal trading profits. These profits, which totaled approximately $364,000 plus interest ("Fund") are now under the control of a Court-appointed Receiver who is responsible for distributing them on a pro rata basis to qualified claimants. (See Litigation Releases Nos. 15875 and 16044).
You may be eligible to receive a pro rata distribution from the Fund:
(1) If you sold USCS common stock and/or USCS Oct30 call options on trade date September 2, 1998 and;
(2) You timely file with the Receiver a Proof of Claim form, and include all required information and all required documentation.
In determining the actual amount you may receive, the Receiver will take into account both your purchases and your sales of the subject securities on trade date September 2, 1998 in order to assure that you were a "net seller" on that date. The amount available to pay claims will be the amount of money in the Fund minus administration expenses and taxes incurred by the Fund. As specified in the Plan, the available distribution will be allocated on a percentage basis among qualified claimants and will be allocated pro rata to the extent claims exceed the available distribution. The Plan provides in part that:
The Receiver or his designee shall, with the assistance of the SEC, review options and stock trading records to identify potential claimants and shall mail to them a claim form and notice describing the SEC's action and the amounts of their sales as reflected in the trading records. The Receiver shall review each claim form and determine the amount (if any) to be paid as follows: If a claimant sold an eligible security on September 2, 1998, the amount of the claim will equal the number of shares or options contracts sold, multiplied by the difference between the price at which the claimant sold the eligible security and the price of the eligible security at the close of trading on September 3, 1998. If a claimant both bought and sold an eligible security on September 2, 1998, such claimant's potential claim shall be limited to the extent that such claimant was a net seller that day. For purposes of calculating the amount of a claim, the claimant's purchase price shall not include any commissions, taxes or other fees that the claimant may have incurred in making the purchase. The Receiver shall deny any claim that would result in a distribution under $25.
Proof of Claim forms have been forwarded to potential claimants. If you are a potential claimant and have not filed a claim or have not received a claim form, please note that the deadline for filling a Proof of Claim form has been extended to July 31, 2000. Accordingly, in order to qualify as a claimant, you must file a completed Proof of Claim form postmarked no later than July 31, 2000 at the address shown below. If you have previously filed a Proof of Claim form, please disregard this notice. If for any reason you file your Proof of Claim form after July 31, 2000, your claim will be denied. Please follow the instructions in the Proof of Claim form very carefully, and be sure to provide documentation in support of your claim as described in the Instructions. All inquiries and communications must be in writing to: