BY MARK HARRINGTON |
mark.harrington@newsday.com
August 8, 2007
A federal judge delivered a potentially fatal
blow last week to dissident CA Inc. shareholder Sam Wyly's efforts to
pursue financial claims against current and former CA officials, rejecting
Wyly's central request to re-open a shareholder settlement reached in
2003.
The settlement relieves current and former executives and directors of the
software company of legal liability in the case, preventing them from
being sued for so-called ill-gotten gains.
In an Aug. 2 ruling a day after a testy court conference, Judge Thomas
Platt ruled that Wyly failed to provide evidence contained in 23 boxes of
late-discovered documents that proved fraud beyond what already had been
acknowledged by the company.
"The years following this settlement have only brought further delay and a
multitude of allegations of fraud with very little, if any, connection to
the 23 boxes," Platt wrote in a ruling last week. "At this point, these
claims fly in the face of the finality which a settlement is intended to
produce. While our system of justice does not tolerate a fraud upon the
court, it also does not permit two bites at the apple."
Lawyers for Wyly in two separate suits have charged that the discovery of
the 23 boxes late in the case effectively nullified the settlement. The
settlement netted shareholders 5.7 million shares valued at more than $140
million, a payout Wyly and his Ranger Governance group rejected.
Shareholders, Wyly lawyers say, should have received much more - closer to
$1 billion.
In a filing late last month, they noted the documents provided evidence of
several other fraudulent accounting practices in addition to charges to
which CA officials ultimately pleaded guilty. They called a report by a
committee of CA's board a "whitewash" - a claim CA has denied. And Wyly
lawyers have charged that CA's main legal representative during settlement
was Steven Woghin, the chief counsel who ultimately pleaded guilty to
obstruction of justice and conspiracy in the case.
"We're very disappointed," said Wyly attorney William Brewer, principal at
the firm Bickel & Brewer in Manhattan. "With all due respect to his honor
[Platt], we think the evidence and the record is ample and in fact far
exceeds" the standard for re-opening the settlement.
He said Wyly, if necessary, "will seek to have that order reversed" on
appeal.
In a letter this week to CA lawyers, Brewer noted that the judge's
decision also had "significant impact" on CA's attempts to pursue claims
against former CA executives who a committee of the board charged were in
part responsible for the accounting fraud at CA. One of them, CA founder
Charles Wang, vigorously denied any connection to the schemes outlined in
a committee report in the spring.
Brewer, in his letter, recommended that Wyly's Ranger Governance and the
committee issue a joint submission to Platt asking for reconsideration.
It's unclear whether the committee will cooperate.
A CA spokesman declined to comment on the judge's ruling or the case,
"since the matter is still in litigation."
