CA in talks to resolve probe

NEW YORK: Computer Associates International Inc. is in discussions with federal prosecutors to resolve a two-year accounting probe that may impose a rarely used form of probation, the Wall Street Journal said, citing people familiar with the matter.

The probes center around allegations that the company improperly booked $2.2 billion in revenues. According to unnamed sources cited by the Journal, a resolution of the joint investigation by the Justice Department and the Securities and Exchange Commission could come within days. It may also include a fine and the appointment of an independent monitor to oversee CA's accounting practices, the newspaper said.

The resolution also is likely to include provisions requiring CA to provide information or assistance to prosecutors in reclaiming compensation granted to executives shown to be involved in wrongdoing, according to one person spoken to by the Journal.

CA's former chief financial officer and three other former top finance executives have pleaded guilty to criminal charges, and await sentencing. CA's newly appointed chairman, Lewis Ranieri, has said the company was working to resolve the matter with the government.

According to the newspaper, CA's lawyers have been arguing to avoid an indictment, which could render CA ineligible to do some business with the federal government.

Deferred prosecution, also known as a "pre-trial diversion", would give prosecutors a way to monitor, and coax reform of, the company's behaviour without dealing it the damaging blow of criminal charges.

No one at CA was immediately available to comment.