SEC Alleges Inside Trading of USCS Shares

Bloomberg News

A New York federal judge froze about $2 million in assets belonging to unknown investors after Securities and Exchange Commission regulators charged the investors may have illegally used inside information to buy USCS International Inc. securities. The traders, through an account in Switzerland, bought $1.6 million in USCS stock on Sept. 2 prior to an after-hours announcement by Kansas City, Mo.-based DST Systems Inc. of plans to acquire the company for about $760 million in stock. "The timely nature of the significant stock purchases and the risky option investments suggests insider trading," said SEC official Jerry A. Isenberg. USCS general counsel James Laramy said his company is cooperating fully with the SEC. Shares of Rancho Cordova-based USCS, which provides billing software and services, fell $1.88 to close at $29 on Nasdaq, and shares of DST Systems, which provides software and computer services to financial-services companies, fell $1.81 to $51.81 on the NYSE.

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