The Commissioner Has A Serious Problem Related To The Company He Used To Run

      From Financial Advisor:

Social Security Administration Commissioner Frank Bisignano’s move into government couldn’t have been better timed, helping the former Fiserv Inc. chief avoid hundreds of millions of dollars in losses from the company’s plunging stock price. 

After the former Citigroup Inc. and JPMorgan Chase & Co. executive was tapped by President Donald Trump this year to lead the SSA, he agreed to resign from Fiserv and divest his stake, including common stock, options, restricted stock units and performance equity grants. Bisignano, 66, was also named CEO of the Internal Revenue Service earlier this month. 

Following his resignation, the restricted stock and a portion of the performance grants vested, giving him more than 3.2 million Fiserv shares worth roughly $594 million when he was confirmed to his role in May.  

Bisignano sold Fiserv stock between May 16 and July 1, according to ethics filings. Based on the average share price during the period, the shares would have fetched roughly $530 million. He later confirmed in a filing that he had completed the divestment.  

The same shares today are worth just $229 million—meaning that selling earlier in the year avoided losses of about $300 million. 

Accepting the government role gave Bisignano another valuable perk. In May, he was granted a certificate of divestiture, deferring capital gains tax on the Fiserv sales provided he invested the proceeds in approved assets such as Treasury bills or broadly-based mutual funds. 

Bisignano didn’t respond to messages seeking comment. 

More than half of Bisignano’s potential losses would have come Wednesday, when the payment company’s shares suffered a record plunge of more than 40% after it slashed its full-year earnings outlook and delivered third-quarter results well short of analysts’ estimates. 

     Did the serious problems at Fiserv only begin AFTER Bisignano left? That seems unlikely on the face of it. Was Bisignano aware of the problems BEFORE he left? That seems likely. If he knew of major problems, why hadn’t he told investors?  If he knew, why was he selling stock based upon inside information? 

     The Securities and Exchange Commission (SEC) would ordinarily investigate this sort of thing but this is the Trump Administration. Nobody in the Trump Administration gets investigated. However, they can’t stop shareholder litigation and I would expect that soon. Bisignano will have to answer questions under oath. 

     By the way, Bisignano needs two lawyers, one for the possible securities litigation and the other for possible criminal charges. Trump won’t be in office forever. Unless he gets a pardon, Bisignano could face criminal charges later. 

     This seems like it could be  a serious distraction to a man with two jobs.

      Update: The litigation has already begun.

     Further Update: Here’s an explanation of what is being alleged:

… Fiserv faces a federal securities class-action lawsuit in the Southern District of New York that accuses the company of inflating growth figures for its Clover payments platform. The complaint alleges Fiserv forced merchants on its older and more affordable Payeezy system to move to Clover while claiming that growth came from new customers. Those migrations allegedly artificially boosted short-term revenue and transaction volumes forecasts which in turn hid slowing organic expansion. When many merchants decided to switch to lower-cost rivals such as Square and Toast, Clover’s performance faltered. According to the lawsuit, former CEO Frank Bisignano told investors in 2023 that 90% of Clover’s revenue growth would come from new merchants and just 10% from existing clients, even as the company moved roughly 200,000 Payeezy merchants to Clover through mid-2024. That shift helped lift Clover’s 2024 revenue to $2.7 billion on $310 billion in gross payment volume, but by early 2025, gross payment volume growth slowed to 8%, down from 14%-17% the year before. …