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
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