U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18981A / November 24, 2004
ACCOUNTING AND AUDITING ENFORCEMENT
RELEASE No. 2141A / November 24, 2004
Securities and Exchange Commission v. Paul H. Bristow and Nikhil Sinha, Civil Action No. CIV04-2601-PHX-FJM
The Commission today filed civil charges against eFunds Corp.'s former chief financial officer, Paul H. Bristow, of Halliburton, Ontario, Canada, and former executive vice president of the business enterprise group, Nikhil Sinha, of Austin, Texas. eFunds, a Delaware corporation with its principal office in Scottsdale, Arizona, processes electronic payments including debit card and automated teller machine transactions. The Commission's complaint alleges that in the second quarter of 2001, eFunds improperly recognized $2.1 million in revenue from a purported settlement payment by an affiliated entity. The complaint alleges eFunds' recognition of the settlement payment as revenue was not appropriate because, among other things, eFunds agreed, in the third quarter of 2001, to reimburse the affiliated entity by paying future consulting fees that would approximate the amount of the settlement payment. The complaint further alleges that Bristow and Sinha each reviewed and approved the arrangement to repay the settlement payment to the affiliated entity, knowing that the future consulting fees would approximate the amount of the settlement payment, and that they were reckless in causing eFunds to recognize the $2.1 million as revenue in the second quarter of 2001.
Bristow, without admitting or denying the allegations in the Complaint, has consented to the entry of a Final Judgment against him enjoining him from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder. The Final Judgment also requires Bristow to pay $53,680 in disgorgement plus $6,999.89 in prejudgment interest and imposes a $30,000 civil penalty.
Sinha, without admitting or denying the allegations in the Complaint, has consented to the entry of a Final Judgment enjoining him from violating Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder. The Final Judgment also requires Sinha to pay $58,152 in disgorgement plus $6,717.56 in prejudgment interest and imposes a $25,000 civil penalty.