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Computer Associates guilty plea

Date Class
10th Apr 2004 Fraud Investigation
 
Details
The former vice president of finance of Computer Associates, the US software giant, has pleaded guilty in an audit probe case.

David Rivard pleaded guilty to conspiracy to commit securities fraud and obstruct justice.

US prosecutors and the Securities and Exchange Commission have spent two years investigating allegations that the firm inflated its accounts.

The calendar says other ex-executives at CA will plead guilty too.

Rivard admitted in court to helping backdate contracts worth hundreds of millions of dollars to make the company's quarterly earnings look higher than they really were.

The former chief financial officer, Ira Zar and David Kaplan, a former senior vice president, are also reportedly going to plead guilty in the case.

"They are pleading guilty, all three of them," the Reuters news agency reported Robert Nardoza, a spokesman for the US Attorney's Office in New York, as saying.

The Wall Street Journal reported that each of the three would face two charges, one of securities fraud and one of obstruction. The paper cited people familiar with the matter.

The Justice Department and the SEC have been investigating allegations that Computer Associates beefed up its books by at least $500m prior to March 2000 by booking contracts into its accounts before they were signed.

Lloyd Silverstein, a subordinate of Mr Zar, pleaded guilty to obstruction in January and is now helping investigators.

Mr Zar, Mr Silverstein and Mr Rivard all resigned from their jobs at Computer Associates in October 2003.

Computer Associates' founder and chief executive Charles Wang retired from the company in 2002. He has not been charged with any offence.

Mr Wang founded Computer Associates in 1976 to develop corporate software. Specialising in security systems and database management, it became the first software firm to clock up $1bn in sales in 1989.

 

 

 


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