CA Free from Oversight

Pending charges dismissed after it complies with terms of a deferred prosecution agreement.
Stephen TaubMay 22, 2007

CA, the software giant formerly known as Computer Associates, announced that it has satisfied the terms of its deferred prosecution agreement and that all pending charges against the company have been dismissed.

After revelations of a $3.3 billion fraud, in September 2004 CA became one of the test cases for a DPA, as these agreements are also known. In exchange for helping prosecutors put guilty individuals behind bars and for completing a host of other reforms, a DPA would allow the company to avoid a full-fledged prosecution.

“This has been a very healthy process for the company, said CA chairman Lewis Ranieri, in a statement.

One condition of the DPA was the appointment of an independent examiner, Lee S. Richards III, whose term was scheduled to expire last September 16. That month, however, the U.S. Attorney’s Office for the Eastern District of New York extended Richards’s term to May 1, partly due to changes in the company’s finance department.

At the time, CA — which only a month earlier had named Nancy Cooper as its new chief financial officer — agreed with prosecutors, the court, and the examiner that the extension was appropriate “given the control environment and commission-related material weaknesses” announced by the company for the fiscal year ended March 31, 2006.

CA also stressed at the time that prosecutors had advised the court that except for the control issues, the company had substantially complied with the terms of the DPA.

In this week’s statement, CA pointed out that in a court filing, the U.S. attorney’s office reported that the company has complied with the agreement, citing the May 1 report by Richards, the independent examiner. As a result, CA added, U.S. District Judge I. Leo Glasser dismissed all pending charges against the company.