More than $9 million of the $65.8 settlement fund in the Bisys Group securities class action is missing. At a hearing in late April before Southern District of New York Judge Jed Rakoff, lead plaintiff's counsel, Gene Cauley, advised "the funds are presently unavailable to be delivered," and when asked why, counsel responded by saying that "if I go into anymore detail, I think I might violate a privilege against self-incrimination." In response, Judge Rakoff said that "it appears not unlikely . . . that Mr. Cauley may have committed a crime or several crimes" and that "he may have committed disbarrable conduct in one or many ways." According to a WSJ.com Law Blog post, in late April, Cauley’s counsel is quoted as stating with respect to the missing $9.3 million that Cauley is "working to be able to find the money and to pay it in 90 days."
On June 1, 2009, Cauley pleaded guilty to wire fraud and criminal contempt of court for misappropriating $9.3 million in client funds. According to the Information filed by federal prosecutors, Cauley "periodically transferred settlement funds from the Escrow Account . . . to pay business expenses from various ventures in which he had an ownership interest, or to fund his own personal investments." The wire fraud charge against Cauley carries a maximum of 10 years in prison and a sentence for criminal contempt is at the discretion of the judge. Cauley will be sentenced on September 10, 2009. Cauley has also agreed to pay $9.3 million in restitution