Quality Systems, Inc. Issues Special Bulletin Announcing That Prohibited Trading by Ahmed Hussein Contributed to QSI Share Price Decline

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Quality Systems, Inc.
QSII
announced today that it has issued a special bulletin to its shareholders announcing its belief that prohibited trading by Ahmed Hussein contributed to QSI share price decline. The special bulletin appears below: *** SPECIAL BULLETIN FOR QSI SHAREHOLDERS*** PROHIBITED TRADING BY AHMED HUSSEIN CONTRIBUTED TO QSI SHARE PRICE DECLINE Sale of More than 1.45 Percent of QSI Stock Jeopardizes Shareholder Value Actions in Direct Violation of Company Policy Fellow Shareholders: In our July 23rd letter, we alerted you to the fact that Ahmed Hussein, a dissident member of the Quality Systems Board, and a shareholder in the company who has proposed a slate of director nominees to take over seven of the nine seats on our Board, pledged all of his shares of QSI as collateral in margin accounts in flagrant violation of QSI's insider trading policy. In that letter, we also told you that we adopted this policy because margin investing, especially by a large investor such as Mr. Hussein, can have a significant negative effect on a company's stock and valuation. Company policies prohibiting insiders from pledging company securities as collateral have become increasingly common and are now recognized as best practice for good corporate governance. We want you to know that on July 26th, a representative of an investment firm in which Mr. Hussein has a margin account notified QSI representatives that at least 800,000 shares of QSI common stock pledged by Mr. Hussein had been sold as a result of a margin call. In an SEC filing, Mr. Hussein confirmed today that a total of 862,047 shares (representing 1.45 percent of the company's outstanding common stock) were sold on July 26th. The next day, another representative of this investment firm advised that additional shares were being liquidated to meet the firm's margin call. Then, on July 30th, a compliance officer from a different investment firm notified a QSI representative that the firm was liquidating an additional 125,000 shares of QSI stock held by Mr. Hussein following a margin call on his account. In addition to violating the company's policy prohibiting margin accounts, Mr. Hussein also sold these shares during a “black out period” in violation of the company's insider trading policy. The company does not know at this time the full extent of any future sales of Mr. Hussein's QSI stock by investment firms in which Mr. Hussein has a margin account or the future effect of such selling on QSI's stock price and the value of your investment. However, the Company believes that his violations of company policy and his financial problems that caused the forced sale of a significant amount of QSI stock contributed to the recent decline in the company's share price and may continue to negatively affect the stock.
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