On January 12, 2011, the SEC filed a complaint against NIC Inc. and others. According to the complaint: "Defendant Jeffery S. Fraser, former Chief Executive Officer ('CEO') and Chairman of the Board of Directors of NIC Inc. ('NIC'), concealed from investors that he received more than $1.18 million in perquisites from NIC from at least 2002 to 2007. Defendants NIC and Fraser failed to disclose Fraser's perquisites and falsely represented in proxy statements, annual reports, and registration statements that until 2005, Fraser worked virtually for free. In NIC's 2006 and 2007 public filings, NIC and Fraser continued to materially understate Fraser's perquisites."

On January 12, 2011, the SEC announced that it charged NIC Inc. ("NIC"), a Kansas-based company that manages government websites, and four current or former company executives--former CEO Jeffrey Fraser ("Fraser"), current CEO Harry Herington ("Herrington"), former CFO Eric Bur ("Bur"), and current CFO Stephen Kovzan ("Kovzan")--with failing to disclose to investors more than $1.18 million in perks paid to Fraser over a six-year period. The SEC filed two complaints filed in federal court in the District of Kansas: one against NIC, Fraser, Herrington and Burn and another against Kovzan. NIC, Fraser, Herrington and Burn have agreed to settle the SEC's charges, while the litigation against Kovzan continues. According to the SEC's complaints, NIC failed to correct Fraser's expense reporting problems even after the finance department employee warned in 2006 of the risk of possible income tax fraud charges, a whistleblower complained to NIC, and the company learned of the SEC's investigation of this matter in mid-2007. The majority of Fraser's perks were not repaid or disclosed, and NIC continued to make misleading public filings. Moreover, NIC failed to disclose to investors in public filings that an internal review concluded Fraser had intentionally misclassified his expenses. Without admitting or denying the allegations, NIC agreed to settle the SEC's charges by paying a $500,000 penalty and hiring an independent consultant to recommend, if appropriate, improvements to policies, procedures, controls, and training relating to payment of expenses, handling of whistleblower complaints, and related party transactions. NIC also consented to a final judgment enjoining it from future violations of the federal securities laws.

On January 18, 2011, Federal District Judge Eric F. Melgren entered final judgment against NIC Inc. pursuant to NIC Inc.'s consent.