Kumar Fingers Wang in Improper Accounting
Bad news for Computer Associates co-founder, Charles Wang
Milber Weiss Faces Investor Lawsuit
, who has found himself thrown under the bus by protege and former CA CEO, Sanjay Kumar. All this is spinning out of the lawsuit filed by Big Texan Sam Wyly, who we've written about before in these parts based on his other adventures in litigation
Labels: CA, Charles Wang, Sam Wyly, Sanjay Kumar
Jail Day for Sanjay Kumar of CA
Texas billionaire Sam Wyly
is concerned that the cozy relationship between Milberg founder Melvyn Weiss
and Computer Associates board of director member (and former highly embarrassing U.S. Senator, Alfonse D'Amato)
, might have undercut the compensation obtained for aggrieved investors in CA.
Wyly has filed suit against Milberg, and a host of other firms who participated in the case (Stull, Stull & Brody
; Schiffrin, Barroway Topaz & Kessler
; and Coughlin Stoia Geller Rudman & Robbins
). A key allegation in the case involves a summer 2003 meeting between Weiss, D'Amato and another CA board member in which a reasonable
settlement was discussed.
The reasonable deal that followed included an end to all pending actions against CA, immunity for past and present CA executives and board members as well as less that a penny to the dollar reimbursment of lost funds - a result which the Wyly team has labeled "one of the most egregious cases of [legal] malpractice I've seen in 23 years.".
Get the full-on details of the Wyly / Milberg suit at Newsday
And for a little more background on Mr. Wyly, including proxy fights at CA and a particularly spectacular hedge fund flame-out, see this BusinessWeek article
Labels: Alfonse D'Amato, CA, Melvyn Weiss, Milberg Weiss, Sam Wyly
Computer Associates CEO Accused of Purging Data to Dodge Investigation
Kumar, CA's former CEO, is set to begin serving a 12 year sentence for his part in the company's multi-billion dollar accounting fraud. Kumar previously plead guilty to federal securities fraud, obstruction of justice and conspiracy charges in exchange for a plea agreement. Former VP of sales, Stephen Richards is already serving his sentence and several other guilty pleas have been entered in relation to the case.Further details on Kumar's sentence at Newsday
Labels: accounting fraud, CA, Sanjay Kumar, Stephen Richard
Computer Associates Problems Continue
CA's ex-CEO Kumar accused of deleting data
February 15, 2006
Sanjay Kumar, ex-chief executive of the company formerly known as Computer Associates Inc., has been accused of destroying potential evidence by erasing his laptop's hard drive as the government gears up for an April 24 trial alleging accounting fraud.
In papers filed Feb. 2 with the U.S. District Court in Eastern New York, the U.S. Attorney's office said it will submit new evidence showing that Kumar reformatted his laptop to run the Linux operating system, which would effectively wipe out the computer's memory. It is also alleged that the reformatting occurred after the start of the government's investigation and after the company issued a directive to employees to preserve relevant evidence.
Kumar, along with former head of sales, Stephen Richards, has been charged with fraud and obstruction of justice in an accounting scandal at CA Inc. (CA), which changed its name in the fall of 2005, partly in an effort to distance itself from the scandal. The two executives were indicted in September 2004.
The government also plans to present evidence that Richards created a directory on his hard drive called "incinerate" shortly after receiving a subpoena from the Securities and Exchange Commission, according to the filing...
Hot stuff. Pun intended.
The Daily Caveat
has been woefully remiss in failing to mention the continuing issues at Computer Associates. It has been a rollercoaster ride for the IT consulting giant over the last few years, weathering accounting errors
and executive scandals
dating back to 2000 that continuing to dog the firm and its reputation.
Just last year CA announced
a 2.2 billion restatement and it late May the company disclosed
that it will again restate revenues - this time for the last five years (2000-2005) based on the need to review 10 questionable transactions. Of the latest restatement, Rich Duprey
had this to say:
The improper contracts are a disturbing discovery because the company has had two months since the end of the quarter to locate such issues but only found them now. Moreover, the discoveries continue to keep in focus the accounting scandals that rocked this company and put four executives on courtroom dockets last year. Computer Associates says it found that it had entered into a swap deal with third parties that had no valid commercial purpose, serving merely to allow it to book revenues early. The new management team says it was former managers who were responsible for the deals, and it has referred the findings to the government.
Full article at Motley Fool
In a recent SEC filing
, CA provides some further information on exactly what went down with these questionable transactions, while sunnily maintaining that the worst is behind them.
Via Accountancy Age
CA digs deeper into financial scandal
Tom Sanders in California
Jun 02, 2005
Computer Associates has been forced to further restate its revenues for 2000 to 2005, opening the latest chapter in its financial accounting scandal. The company admitted in a newly published filing with the Securities and Exchange Commission (SEC) that a further review of its accounts for the period reveals that it wrongly booked deals as revenue that should have been booked as barters. 'These transactions appear not to have been negotiated on an arm's-length basis and to have no valid commercial purpose,' the filing stated.
CA also identified some deals that required it to reach certain targets. Those revenues should not have been booked until those target dates, CA said. The company expects to reduce recorded sales from 2000 to 2004 by $95m (£52m) to $125m. The restatement will add $7m-$10m to 2005's revenues.
Senior managers who were responsible have since left the company, the filing said. CA fired chief executive Sanjay Kumar in June 2004. He has since been charged with securities fraud and obstruction of justice. The vendor hired former IBM executive John Swainson as his replacement. Kumar was closely associated with CA founder Charles Wang, who retired in 2002 amid increasing calls for a management overhaul within the company.
The SEC said last September that CA had prematurely booked more than $3.3bn in revenue from 1998 to 2000.
Michael Dortch, principal analyst with the Robert Frances Group, told Accountancy Age sister website vnunet.com that, although the latest restatement adds yet another chapter to CA's ongoing bookkeeping scandal, it will not have much of an impact on how users view the company.
'If the transactions had been more recent, it would have been more damaging. Given that they relate to 2000 and 2001, most customers will look at this as the final stages of house cleaning,' he said. The filing coincided with the publication of financial results for the quarter ending 31 March. CA reported $910m in revenues, up seven per cent over last year, but profit fell 81 per cent to $17m.
The original Accountancy Age
article can be found here