Criminal charges for former iSoft directors
Thursday 07 January 2010
The UK's chief City regulator, the Financial Services Authority, yesterday charged four former directors of iSoft, including the group's founder, Patrick Cryne, with offences relating to misleading stock market statements.
The healthcare software company said in 2006 that the City watchdog was probing the firm over "possible accounting irregularities". The group was forced to restate its financial results in 2004 and 2005, which led to a £72m profit in 2005 being reduced to zero. At the time, iSoft was working on a £6.2bn IT upgrade for the NHS.
The FSA confirmed in a statement that Mr Cryne, a former chairman; Timothy Whiston, a former chief executive; John Whelan, iSoft's former finance director; and Stephen Graham, its former chief operating officer, would all face magistrates on 29 January. They have been charged with conspiracy to make misleading statements. If found guilty, they face up to seven years in prison.
Mr Cryne, who also owns Barnsley Football Club, issued a statement yesterday saying he was "surprised and disappointed at the position arrived at by the FSA".
ISoft, which was bought by Australia's IBA Health in 2007, said it welcomed the move and an end to the investigation. "The FSA result brings to a conclusion one of the remaining legacies of the former iSoft, which we acquired in 2007," said chief executive Gary Cohen. "We cooperated fully with the investigation and welcome the FSA's decision."
The move to prosecute follows a trend in recent years of the FSA bringing criminal proceedings against those suspected of misleading the markets. In 2005, Carl Rigby, the former executive chairman of AIT, a call-centre company, was jailed for three and a half years for recklessly issuing misleading statements.
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