While a Securities & Exchange Commission (SEC) continues its
investigation into accounting irregularities at software company
, three former finance executives
were pleading guilty to federal charges in a Brooklyn court Thursday.
The three accountants — Ira Zar, CFO, and two former senior vice
presidents of finance David Kaplan and David Rivard — “are pleading
guilty, all three of them,” Bob Nardoza, Brooklyn U.S. Attorneys Office spokesperson, said to Reuters.
The SEC is looking into charges the former executives “cooked the
books,” among other things, to present a stronger financial face to
investors. Allegedly, company officials renewed existing contracts with a higher up-front fee and then passed them off as new revenue,
bolstering their earnings reports.
In December, the government agency delivered a Wells Notice —
notification that staffers are considering pressing forward with civil enforcement proceedings — after investigations uncovered irregularities in CA’s software licensing contracts dating back to 2000.
Last year, the Islandia, N.Y.-based company settled three class-action lawsuits filed by shareholders for about $144 million in stock.
Company chairman and CEO Sanjay Kumar has not been charged in connection with the financial accounting probes, and has gone about the business of moving on, replacing his interim CFO(who took over after Kaplan resigned in December 2003) with Jeff Clarke, a former Compaq CFO.
Bob Gordon, a CA spokesperson, said the company has no comment on the current proceedings, nor is it making any comments about the internal measures the company has put in place as a result of the SEC investigation.