UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 15875 / September 9, 1998 SECURITIES AND EXCHANGE COMMISSION v. ONE OR MORE UNKNOWN PURCHASERS OF CALL OPTIONS AND COMMON STOCK OF USCS INTERNATIONAL, INC., No. 98-Civ-6327 (S.D.N.Y.)(September 8, 1998) COURT FREEZES PROCEEDS OF SUSPICIOUS TRADING IN SECURITIES OF USCS INTERNATIONAL, INC. SEC, In Emergency Federal Court Action, Obtains Order Freezing About $2 Million In Proceeds From Sales Of USCS Securities By Persons Who Bought Just Before Merger Announcement The Securities and Exchange Commission announced that the U.S. District Court for the Southern District of New York entered a Temporary Restraining Order late yesterday against certain unknown purchasers of call options and common stock of USCS International, Inc., temporarily prohibiting the unknown persons from obtaining the trading proceeds. The Commission's complaint alleges that the unknown purchasers engaged in illegal insider trading just before the announcement on September 2, 1998 that DST Systems, Inc. intended to acquire USCS. The Commission alleges that the unknown persons purchased 200 out-of-the-money USCS call options and 61,800 shares of USCS common stock for more than $1.6 million through an account in Zurich, Switzerland on September 2. According to the complaint, the buyer or buyers sold the option contracts on September 3, obtained profits of nearly $70,000, and transferred the proceeds to Switzerland. The Commission also alleges that on September 3 the unknown persons sold all 61,800 shares of USCS common stock for profits of as much as $500,000. According to the complaint, the 61,800 share sales transaction will not settle until today. In the pending lawsuit, the Commission alleges that the unknown defendants engaged in illegal insider trading in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5. The Commission seeks permanent injunctive relief, the disgorgement of all illegal profits, and the imposition of civil monetary penalties. The Court's Temporary Restraining Order prohibits the removal of the trading proceeds, estimated to be approximately $2 million, for a 10-day period. In addition, the court's Order imposes an expedited discovery schedule and prohibits the defendants from destroying documents. The Commission acknowledges the assistance of the American Stock Exchange in this matter.