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Yesterday, CA announced that it is officially out of trouble with the Feds. The U.S. Attorney's office announced that the company (formerly Computer Associates), had complied with the deferred prosecution agreement (DPA).
That must be a relief to all concerned — especially the government. After killing Arthur Andersen, the last thing the Feds wanted to do was bring down another iconic company, no matter how big a mess its former management made.
Still, it was touch-and-go there. Not long after CFO magazine reported on new CFO Bob Davis's "Race to Reform" before the company's DPA, CA suffered another meltdown, which led to Davis's departure and resulted in an extension of the term of the federally appointed examiner. Even when that happened, the government was careful to note that the company was still on track for a May reprieve, reminding me very much of times I've immediately regretted threatening my five-year old with some punishment — "If you don't behave, we won't go to the baseball game at all" — that I have no desire to carry out.
Indeed, deferred prosecution agreements were conceived as a way of avoiding Andersen-style death penalties. According to "Deferring That Day in Court," a story we wrote over a year ago, the Feds had entered into more than 20 DPAs since 2002, with CA being one of the first. But the company had such a hard time that I suspect those numbers might be on the downswing too, in favor of prosecuting individual executives.
After all, the government had rather good success prosecuting former Computer Associates executives, including its CFO and CEO Sanjay Kumar. I imagine we'll be reporting more on that than on DPAs in the future.
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