RealTime IT News

CA Free of Big Brother's Watch

CA  can exhale now that the government isn't officially looking over its shoulder.

The software maker, recovering from an accounting scandal perpetrated by a former CEO and other top officers, said a U.S. judge has dismissed all charges against the company because it has met the terms of the Deferred Prosecution Agreement (DPA).

CA entered into the DPA in September 2004 to pledge improvements in its accounting practices. As part of the agreement, the U.S. Attorney's Office agreed not to prosecute CA so long as it complied with the remedial steps for improvement.

Independent examiner Lee S. Richards III, who oversaw CA's accounting since the agreement started, confirmed that CA had "complied with" the DPA terms, and U.S. Judge I. Leo Glasser dismissed all pending charges against the company, according to the U.S. Attorney's office in Brooklyn, N.Y.

"We can now put this chapter behind CA and devote our time, energy and passion to our customers and our business," said CA President and CEO John Swainson. "We have done much over the past two years to set this company on a course of sustainable growth. In the future, we will do even more."

Swainson added that CA will "continue to demand a high level of transparency, ethical behavior and integrity from our entire organization."

CA entered into the DPA to avoid prosecution in what the government termed a $2.2 billion accounting scandal.

In what prosecutors called a "35-day month" practice, CEO Sanjay Kumar and other executives did not record revenues associated with some software-license agreements in the proper quarter. This scheme inflated CA's quarterly revenue and earnings to hide actual losses.

Kumar, who pled guilty last year, agreed to pay $52 million in restitution as part of his guilty plea to securities fraud and obstruction of justice. He is also expected to serve a 12-year prison sentence.