The Securities and Exchange Commission named Lee S. Richards as independent examiner for Computer Associates International Inc.

Under last fall’s settlement agreement between the Islandia, New York-based software company and the U.S. Attorney’s Office for the Eastern District of New York, government officials agreed to recommend that the U.S. District Court defer prosecution of the company for 18 months following the appointment of an independent examiner. A growing number of companies

Richards, a former Manhattan prosecutor, will examine Computer Associates’ compliance with the terms of that agreement, make recommendations to CA’s board regarding best practices, issue quarterly reports to the SEC and U.S. Attorney’s Office, as well as a final report.

The best practices that Richards will examine, according to the SEC, will concern subjects including recognition of software licensing revenue, internal accounting controls, implementation of a new enterprise-resource-planning software system, internal audits, ethics and compliance policies, and management policies and procedures.

Computer Associates is one of growing number of companies that have agreed to a form of corporate probation that enables them to avoid criminal prosecution in exchange for good behavior. Other companies that recently agreed to independent monitors as part of a settlement with government agencies include MCI, Symbol Technologies, Spiegel, and Putnam.

The highest-profile monitor in recent years was former SEC chairman Richard Breeden, who was brought in to oversee the former WorldCom. In August 2003, Breeden set forth a list of 78 changes that MCI would be required to make in its corporate governance structure as part of U.S. government sanctions for accounting fraud.

When the SEC settled charges against American International Group last fall, arising out of the insurer’s offer and sale of an earnings management product, the company agreed to the appointment of an independent consultant to examine certain AIG transactions going back to 2000. AIG also agreed to establish a committee to review certain future transactions involving heightened legal, reputational, or regulatory risk, according to the SEC.

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