Securities and Exchange Commission
Litigation Release No. 17172 / October 4, 2001
Accounting and Auditing Enforcement Release No. 1465 / October 4, 2001
SEC Obtains Emergency Relief against Aremissoft Corporation and Two Former
Officers for Financial Fraud, Insider Trading
Securities and Exchange Commission v. Roys Poyiadjis, Lycourgos Kyprianou
and AremisSoft Corp., Civil Action No. 01-CV-8903 (S.D.N.Y.)
On October 4, 2001, the Commission filed a civil injunctive action
against AremisSoft Corporation, an international software company with
offices in New Jersey, London, Cyprus, and India, and two former
officers, Roys Poyiadjis and Lycourgos Kyprianou, alleging that they
overstated the value of the Company's contracts, revenues and recent
acquisitions, and that the two former officers engaged in massive
insider trading during the period of the reporting fraud. On the same
day, the Honorable Charles S. Haight, Jr., United States District
Judge for the Southern District of New York, granted the Commission's
motion for emergency relief against AremisSoft, Poyiadjis and
Kyprianou.
Based on evidence that all three defendants engaged in financial fraud
and Poyiadjis and Kyprianou, both former chairmen and CEO's of the
Company, also engaged in insider trading, the Court's Order restrains
the defendants from violations of the anti-fraud, reporting and other
provisions of the federal securities laws pending a hearing on the
Commission's motion for a preliminary injunction. The Court's Order
freezes the assets of Poyiadjis and Kyprianou, and directs them to
repatriate to the United States the proceeds of their sales of
AremisSoft stock. The Order also grants the Commission's request for
expedited discovery.
According to the Commission's complaint
* On December 17, 1999, AremisSoft announced "the signing of a $37.5
million agreement to automate the nationwide healthcare system of
Bulgaria." Poyiadjis and Kyprianou publicly touted the Bulgarian
contract as of major significance for the Company's business
prospects. The Company recognized approximately $7.1 million in
revenue from this contract during 2000 and $1 million more in the
first quarter of 2001. In fact, the value of the Bulgarian
contract is no more than $3.7 million, and the Company can
presently substantiate only about $1.7 million of the revenue
recognized on it.
* AremisSoft's "Emerging Markets Group," headquartered in Cyprus,
SNIPPETS:
Securities and Exchange Commission
SEC Obtains Emergency Relief against Aremissoft Corporation and Two Former Officers for
On October 4, 2001, the Commission filed a civil injunctive action against AremisSoft
Based on evidence that all three defendants engaged in financial fraud and Poyiadjis and
The Court's Order freezes the assets of Poyiadjis and Kyprianou, and directs them to
According to the Commission's complaint * On December 17, 1999, AremisSoft announced "the
Poyiadjis and Kyprianou publicly touted the Bulgarian contract as of major significance for
The Company recognized approximately $7.1 million in revenue from this contract during 2000
In fact, the value of the Bulgarian contract is no more than $3.7 million, and the Company
* AremisSoft's "Emerging Markets Group," headquartered in Cyprus, reported roughly $89
Most of this amount, however, was based on purported sales to entities that either do not
* The Commission charges that, through the above conduct AremisSoft, Poyiadjis and Kyprianou
The Commission would like to acknowledge the Office of the U.S. Attorney for the Southern
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