Veritas accused of improper accounting

SAN FRANCISCO: Shareholders have filed a lawsuit in federal court against Veritas Software Corp., alleging that executives profited from insider information before the company said it would restate results because of accounting irregularities.

The company, which makes software to facilitate data storage, earlier this month said it would restate eight quarters of results due to an improperly booked deal with the AOL Time Warner unit America Online.

In a lawsuit filed Jan. 21 in San Francisco federal court, plaintiff Richard Petrone leveled claims against Veritas Chief Executive, Gary Bloom; its former Chief Financial Officer, Kenneth Lonchar; and Paul Sallaberry, Veritas' outgoing executive vice president of worldwide field operations.

Petrone's attorney at Milberg Weiss, a San Diego-based securities firm that specializes in shareholder actions, and a spokeswoman for Veritas declined comment on Wednesday.

The suit was among several securities related actions filed against the company over the past two weeks. Cauley Geller Bowman & Coates, a Little Rock, Arkansas-based law firm specializing in class-action lawsuits, said on Tuesday that it had filed a similar insider-trading complaint against Veritas.

The San Francisco lawsuit alleged that Veritas executives Lonchar and Sallaberry personally profited from the improper accounting to the tune of nearly $15 million after Veritas issued misleading and inaccurate financial information that caused its stock price to be inflated falsely.

Veritas shares, which traded above $168 in March 2000, finished Wednesday's Nasdaq session at $18.68.

The lawsuit also alleged that Lonchar, who resigned in October after it was learned that he had falsely claimed to have earned an advanced degree in business administration from Stanford University, collected $4.6 million from stock sales.

The plaintiffs also claimed Bloom told reporters the debacle surrounding Lonchar's resume had no bearing on the accuracy of the company's financial results.

© Reuters