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Suspension of Shareholder Delegate Inquiry
Pending Examiner Report
(August 30-September 6, 2005)
Copied below is the text of a September 6, 2005 letter from
the Forum manager to the
court-appointed Examiner responsible for reporting to the United
States Attorney on Computer Associates' management's compliance with the
conditions of the company's
Deferred Prosecution Agreement, including its
paragraph 12(d) requirement of a policy for responding to investor inquiries.
Copies were sent to the chairman of CA's board of directors and to the United States Attorney
for the Eastern District of New York, who is responsible for the Deferred Prosecution
Agreement.
A scanned copy of the referenced management communication, dated August 30,
2005 from Kenneth V. Handal, CA's secretary, executive vice president and
general counsel, can be downloaded from a link
in the section following the letter's text, below.
The letter informs the Examiner of new management statements
evidencing the CA board's continuing tolerance of misleading public
communications, and reports that the shareholder Delegate has suspended efforts
to review records of director performance pending the Examiner's report.
Reference is made to management's August 22,
2005 letter reversing the position of the company's attorneys who had stated
an intent to comply "amicably" with the shareholder Delegate's
June 27, 2005 demand
for records, as reported in the referenced
August 26, 2005 Newsday article.
The attorneys' agreement for assuring compliance with securities laws can be
downloaded from the following link:
Subsequently, one of the demanded records, minutes of a
July 2003 board meeting contradicting company statements about director
responsibility for the initiation of an independent audit committee
investigation, was made available to the public in a court filing by the
U.S. Attorney in its criminal prosecution of former CA executives.
[letterhead]
LUTIN & COMPANY
575 Madison Avenue
New York, New York 10022
Telephone (212) 605-0335
Facsimile (212) 605-0325
September 6, 2005
By telecopier: 917-344-8840
Lee S. Richards, Esquire
Richards Spears Kibbe & Orbe
One World Financial Center
New York, New York 10281
Re: Computer Associates International, Inc.
Deferred Prosecution Agreement
Dear Mr. Richards:
The accompanying letter from Mr. Handal, dated August 30 and
faxed to me September 1, is being sent to you for your consideration in
reporting on management’s compliance with the conditions of CA’s Deferred
Prosecution Agreement.
It is apparent from this letter that CA’s board has not yet
taken any effective action to assure management’s proper response to
investor inquiries. Knowing that Forum policy would require the public
posting of his letter, Mr. Handal has again made public statements that
are inconsistent with the record of communications.
Addressing specifically Mr. Handal’s reference to a “misleading story” in
the August 26 issue of Newsday, I read the article carefully again
and found nothing inaccurate in its reporting of CA communications with
the Forum or shareholder Delegate.
As indicated in my August 23 letter to Mr. Ranieri, copied to
you at the time, there was and is no need for CA management to communicate
further with me until the board has defined a policy that you and the U.S.
Attorney consider satisfactory to guide CA’s proper responses to investor
inquiries. It is also my understanding that the shareholder Delegate and
his attorneys will be suspending their efforts to review records of
director performance until your report shows how they should proceed.
Please let me know if there is any additional information I
may provide to support your review of this or any other CA policy that
concerns the company’s shareholders and the investing public.
Sincerely yours,
Gary Lutin
Enclosure
cc: Roslynn R. Mauskopf, Esquire
Mr. Lewis S. Ranieri
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