Quality Systems 2008 Proxy Contest vs. Ahmed Hussein
 
 
 
Background on Mr. Hussein
 

For all of their volume and bluster, Mr. Hussein’s proxy materials have remarkably little to say about the man himself, his personal and business experience and his business plan were he to seize control of Quality Systems.  When you learn a bit more about him, you can understand his reticence on these subjects.  A close examination of his record reveals an undistinguished career and documented examples of value destruction and untrustworthy behavior, including:

  • Mr. Hussein's (unsuccessful) litigation over his termination from Dean Witter for violations of company policy, including making a false statement in an internal questionnaire. (see Dean Witter link below)
  • Litigation brought by a client relating to, among other things, excessive trading in a discretionary account managed by Mr. Hussein on behalf of an elderly couple which resulted in the account value dropping from over $2.4 million to approximately $70,000.  The client’s case was ultimately settled by Mr. Hussein's employer for $2.5 million (see the Frota case link below).

  • The American Stock Exchange's censure of Mr. Hussein in connection with his handling of the Frota account.   The exchange found that, among other things, Mr. Hussein excessively traded and churned the customer’s account for the purpose of generating commission income, misrepresented the status of the account to the customer and provided materially false and misleading information about the status of the account (see the Frota case link below).

  • Proceedings brought with respect to Mr. Hussein’s nonpayment of income taxes aggregating approximately $700,000 for tax years 1983 and 1984. Mr. Hussein underpaid his personal income taxes and later claimed that he did not have the means to pay the taxes he owed. (see Tax Proceedings link below)

  • Mr. Hussein’s involvement with SIMO, which experienced significant financial difficulties during Mr. Hussein's tenure as Board chairman.  SIMO was a successful Egyptian paper company, privatized by the Egyptian government in June 1997 in which Mr. Hussein acquired a majority stake and was appointed Chairman of the Board.  During his term as Chairman,  SIMO’s financial position deteriorated, incurring losses to the extent that its employees were not being paid during certain periods of 1998.  Ultimately Mr. Hussein was removed from his position as Chairman by the Companies Authority in the Egyptian Ministry of the Economy (see SIMO link below).

  • Mr. Hussein's unsuccessful litigation against Quality Systems disputing the results of the 2005 director of elections (see Hussein's 2005 Attempt tab).
We believe the Frota and SIMO examples are highly relevant given that Mr. Hussein is now asking two things of Quality Systems shareholders: 1) to turn over control of the company to him by electing him and his hand-picked slate of director nominees; and 2) to change our corporate bylaws to alter the definition of an independent director, thus minimizing the influence of Sheldon Razin, our independent Chairman, while increasing Mr. Hussein’s own influence. The details in the links below clearly show why this would be a risky gambit for shareholders to take.


Ahmed Hussein’s Civil Suits, Regulatory Actions & Customer Complaints 1985-2002
During the course of his career, Mr. Hussein has been involved, as a plaintiff and as a defendant, in a number of lawsuits, regulatory actions and related complaints from his own clients.  The timeline included in the link below provides an illustration of his pattern of litigious behavior.

- Timeline of Ahmed Hussein’s Civil Suits, Regulatory Actions & Customer Complaints


Frota vs. Prudential-Bache Securities, Inc., Ahmed Hussein & John Rasweiller

-  Summary of the Case and ASE Censure
-  Denial of Defendant's Motion to Dismiss
-  American Stock Exchange Decision
-  American Stock Exchange Stipulation


Middle East Paper Company (SIMO)
-  SIMO Overview
-  Excerpts from Post Privatization Development of Former Law 203 Companies


Hussein v. Dean Witter
-  Summary of the Case
-  Hussein's Demand for Arbitration
-  Dean Witter's Response
-  Arbitration Award


Tax Proceedings
-  Summary of the Case
-  Hussein's Affidavit
-  Denial of Hussein's Motion for Injunction
-  Court of Appeals Opinion

 

 

 

Letters to Shareholders & Press Releases

Response to Mr. Hussein’s 13D
Response to Mr. Hussein's Proxy Materials
QSI Performance
Investor Presentation
Hussein’s 2005 Attempt
Background on Mr. Hussein
Background on Mr. Razin
Voting Instructions
Contact Our Proxy Solicitor
QSI 2008 Proxy Statement
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