Computer Associates Accounting Scandal

Computer Associates International, Inc was founded in 1976 by Queens College graduate Charles B Wang along with others including Russell M Artzt.

In 1980 due to its success of a product called "ca-sort", Computer Associates was able to buy a Swiss company by the same name (CA).

 

Computer Associates was first listed on the New York Stock Exchange in 1981.

In 1990, do to it's rapid expansion, Computer Associatesmoved it headquarters to an attractive tax-free plot of land in Islandia, just north of the Long Island Expressway, in NY.

In 2000, a class-action lawsuit accused founder Charles Wang, co-founder Russell Artzt of wrongly reporting more than $500 million in revenue in its 1998 and 1999 fiscal years, in order to artificially inflate the stock price.

A previous stock option set in 1995 specified that a certain number of shares would vest when CA's shares sustained a target price. The benchmark was met in 1998, and the three executives combined received nearly $1 billion in Computer Associates stock. Since then, at least four other class-action suits have been filed against Computer Associates.

In 2002, Charman and CEO Charles Wang retired and was succeeded by his colleague Sanjay Kumar.

 

In 2004, new management reached a deal with the SEC to pay $225 million in compensation to shareholders victimized by the company's criminal conduct. Former CEO Sanjay Kumar was formally indicted by a grand jury on counts of fraud, and obstruction.

In 2004, IBM executive John Swainson became Computer Associates's CEO Elect.

 

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