Supporters react as Republican presidential nominee and former U.S. President Donald Trump speaks during a campaign rally in Novi, Michigan, U.S. October 26, 2024. REUTERS/Carlos Barria TPX IMAGES OF THE DAY
The new CEO of the financial services technology company Fiserv said Wednesday that the firm’s financial outlook was grim, sending its stock collapsing by more than 40% and erasing $30 billion in market value—and laid the blame squarely with a Trump administration appointee whom the president has praised as “amazing.”
When nominating former Fiserv CEO Frank Bisignano as Social Security administrator earlier this year, President Donald Trump said the executive frequently “takes troubled entities and turns them around.”With current Fiserv chief Mike Lyons warning on Wednesday that Bisignano had made major missteps as CEO, overinflating its sales projections and relying on short-term cost-cutting before selling his stock for $500 million, the advocacy group Social Security Works said beneficiaries of the government’s anti-poverty program for senior citizens should be alarmed that the former executive is now in charge of their crucial benefits.
“Fiserv lost 40% of its value because the former CEO, Frank Bisignano, is a liar,” said SSW. “But Bisignano is Trump’s buddy, so he can only fail up. He’s now in charge of your Social Security.”
Lyons told analysts and investors that when Bisignano was leading Fiserv from 2020 until earlier this year, the company made sales projections that “would have been objectively difficult to achieve even with the right investment and strong execution.”
He added that Bisignano made “decisions to defer certain investments and cut certain costs [which] improved margins in the short term but are now limiting our ability to serve clients in a world-class way, execute product launches to our standards and grow revenue to our full potential.”
Translating Lyons’ comment, Brett Arends wrote at MarketWatch that “under Bisignano, the company made forecasts it could not plausibly have achieved” and that the former CEO “was chasing short-term quarterly results, not building the business.”
“Did Bisignano know that Fiserv’s stock was about to tank, and ask his friend Donald Trump for a life raft?”
Lyons broke the news to investors weeks after a police pension fund sued Fiserv and Bisignano, as well as the new CEO, for “artificially inflating [Fiserv’s] growth numbers.”
But along with causing his former company’s value to plummet, emphasized SSW president Nancy Altman on Thursday, Bisignano personally benefited from overestimating his firm’s performance—selling more than three million shares after he was appointed Social Security administrator for at least $500 million.
“That sale saved him $300 million (and counting) in stock value,” said Altman. “Did Bisignano know that Fiserv’s stock was about to tank, and ask his friend Donald Trump for a life raft?”
Altman demanded that Bisignano “resign immediately” from his roles at the Social Security Administration and the Internal Revenue Service, where he was also named the first-ever CEO earlier this month.
“Bisignano is in charge of the American people’s hard-earned Social Security benefits, as well as the collection of our taxes—despite his total lack of expertise, or even basic knowledge, of either,” said Altman. “He infamously admitted that he had to Google ‘Social Security’ when Trump offered him the job. If he engaged in wrongdoing, the people need to know.”
Altman called on the US Department of Justice and Congress to launch “immediate” investigations into Bisignano’s conduct as CEO of Fiserv, but noted that with Republican allies of Trump running the government, the former executive is unlikely to be held accountable.“
“The only recourse,” said Altman, “is for Democrats to win control of Congress and make investigating Bisignano a top priority.”