CA, DOJ Find Ways Around Further Prosecution
The software maker strikes a deferred prosecution deal with the government to avoid a securities fraud and obstruction trial. The company will help investigators on the case against former employees and top brass.Computer Associates International Inc. took a big step toward putting the long-running investigation by the U.S. Department of Justice and Securities Exchange Commission behind it. The software maker on Wednesday struck a deferred prosecution deal with the government. At the same time, the government indicted former Chairman and CEO Sanjay Kumar on federal securities fraud and obstruction charges. As part of its deal to save itself from prosecution, officials of the Islandia, N.Y.-based CA said the company is cooperating with officials in the investigation of Kumar. Under the agreement, CA will establish a $225 million restitution fund for current and former shareholders; help the government try to recover compensation from present or former CA officers or employees who participated in the accounting fraud and cover-up; and agreed to be monitored by an independent examiner over 18 months to insure that CA stays in compliance with its agreement. After the 18 month period, if it is deemed CA operated in compliance with its agreement, charges will be dismissed.
CA will have to demonstrate to customers and the market that its more virtuous than the average corporation in all of its business practices, according to eWEEK.coms Enterprise Applications Center Editor John Pallatto. Click here to read more.