Intuit has pulled out of a deal agreed last December to buy electronic payment services provider Electronic Clearing House Inc for $142m.
The reason for the collapse of the deal was not revealed, but Camarillo, California-based Echo also revealed that it has been cooperating as a witness in a federal investigation relating to its internet wallet customers that provided services to online gaming web sites.
It said that under a non-prosecution agreement expected to be executed shortly, the government will assure Echo that it will not pursue any action against the company. Echo said it has in turn agreed to disgorge $2.3m, which represented management’s estimate of the company’s profits from processing and collection services provided to its internet wallet customers since 2001.
It has agreed to continue cooperating as a witness in the investigation and earlier this year, it ceased all processing and collection services for its remaining internet wallet customers. Echo expects to incur additional legal expenses related to the federal investigation.
Echo and Intuit have agreed to release each other from all claims related to the terminated merger agreement.