Something's fishy in Camarillo

The $142 million acquisition by Internet giant Intuit seemed all ready to go and then, Bam!, it's kaput. Electronic Clearing House, which handles the processing and collection of Internet commerce, disclosed this morning that it was a witness in a federal investigation and that the deal with Intuit was off. Electronic Clearing House, according to an SEC filing, has agreed to shell out $2.3 million and in return the U.S. Attorney for the Southern District of NY won't pursue the company in connection with an investigation into online gaming Web sites. The $2.3 million is what ECH made from e-wallet transactions (it's basically the electronic equivalent of a wallet for e-commerce purchases).

No one is offering any specifics about what happened, but it obviously came down pretty recently because according to the company's Jan. 29 proxy statement, everything was hunky-dory. In fact, a March 7 shareholders meeting was supposed to seal the Intuit deal. Well, on March 6 ECH announced that the meeting had been delayed until March 27. The company's president and COO, Chuck Harris, sent out a company memo that day in which he said that "there are some closing conditions that still need to be satisfied. I just want to let you know that we do not expect any of these items to affect the closing of the transaction at this time - they just require additional time to be completed." Whatever the explanation, lots of money was lost today - Intuit had planned to buy ECH for $18.75 a share; the stock closed today at $12.23, down 34.3 percent on the day.