Senate Democrats are pressing Fiserv Inc. for information on the role former chief executive Frank Bisignano played in the company’s plummeting fortunes before he took a role in President Donald Trump’s administration.
Firserv’s shares plunged late last month after the company slashed its full-year earnings outlook and delivered third-quarter results well short of analysts’ estimates. Bisignano, who is currently leading both the Social Security Administration and the Internal Revenue Service, dodged a roughly $300 million loss because he divested his stake in the company before October’s downturn.
Senators Ron Wyden and Elizabeth Warren, the top Democrats on the Senate’s Finance and Banking committees, asked Fiserv’s new CEO Mike Lyons in a letter about Bisignano’s involvement in the now-disavowed financial projections for the company, as well as bids by the firm for federal contracts.
Lyons told investors last month that the company’s financial estimates when Bisignano was in charge “would have been objectively difficult to achieve even with the right investment and strong execution.”
Fiserv stock has tumbled since its former chief executive, Frank Bisignano, left to join the Trump administration in May.
“At a minimum, Mr. Bisignano appears to have failed to manage Fiserv effectively, and may have misled investors and the public about the company’s financial status, raising concerns about his ability to serve as a key Social Security and IRS official in the Trump Administration,” the senators wrote.
The senators said Bisignano owned about $594 million of Fiserv stock when he won Senate confirmation in May, and sold it between May 16 and July 1, when it was worth about $530 million. A tax break for the president’s appointees allows them to defer taxes on capital gains for such divestments.
The senators requested a response by Nov. 20. The letter was first reported by The Wall Street Journal.
Fiserv did not immediately return a request for comment. The Social Security Administration and the IRS also did not immediately return requests for comment.
