ACCOUNTING FRAUD SETTLEMENT
9/11 lawyer will oversee CA restitution
BY MARK HARRINGTON
STAFF WRITER
November 5, 2004
The attorney who oversaw distribution of the Sept. 11 victims fund was named
yesterday to oversee a fund to compensate shareholders of Computer
Associates International Inc. following its recent settlement of accounting
fraud charges with the government.
Kenneth Feinberg, a New York lawyer named in 2001 to oversee the $7 billion
Sept. 11 Victims Compensation Fund, will take on the job of administering
the distribution of $225 million to shareholders wronged in the wake of
Computer Associates' $2.2-billion accounting scandal.
Separately yesterday, the Federal Trade Commission granted early clearance
for CA's planned $430 million purchase of computer security firm Netegrity.
The sale must also be approved by Netegrity shareholders at its annual
meeting later this month, and by foreign antitrust authorities, a
spokeswoman said. Yesterday, Hewlett-Packard announced a program aimed at
courting Netegrity customers with deep discounts on identity management
software.
The restitution fund, which CA will pay in $75 million increments over the
next 18 months, was established as part of a deferred prosecution agreement
reached in September between the company and federal authorities, who have
been investigating the company's accounting since 2002. CA acknowledged past
employees engaged in securities fraud and obstruction of justice, and agreed
to a series of measures, controls and an in-house monitor to correct the
procedural and structural issues that led to the accounting problems.
Feinberg, who could not be reached for comment, is a highly regarded lawyer
who has served as an arbitrator in high-profile cases involving victims of
asbestos and Agent Orange. He was a special settlement master in the case
that pitted citizens of Suffolk County against the Long Island Lighting Co.
over the Shoreham nuclear facility.
Feinberg was also a former aide to U.S. Sen. Edward Kennedy (D-Mass.) and a
former Manhattan prosecutor in the U.S. attorney's office.
In the CA case, he will be responsible for holding funds paid by CA in his
custody, developing a formula to pay funds to present and former CA
shareholders who were victims of the accounting fraud and obstruction of
justice, and distributing the funds to the eligible victims.
The costs for his services will be paid by CA, not the restitution fund,
according to a statement from U.S attorney for the Eastern District, Roslynn
Mauskopf, whose office is overseeing the probe and negotiated the deferred
prosecution agreement.
Under the agreement, he has up to six months to finalize a distribution
formula and submit it to Mauskopf's office for approval. Shareholders
inquiries concerning the fund can be sent to: Office of the Administrator,
Computer Associates Restitution Fund, P.O. Box 19587, Washington, D.C.,
20036.
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