CHICAGO, April 19, 2002 (PRIMEZONE) -- Much Shelist Freed Denenberg Ament & Rubenstein, P.C. announces that class action lawsuits are pending in the United States District Court for the Eastern District of New York on behalf of purchasers of the securities of Computer Associates International Inc. (NYSE:CA) ("Computer Associates" or the "Company") between May 28, 1999 and February 25, 2002, inclusive (the "Class Period"). The lawsuits are against defendants Computer Associates; Charles B. Wang, Computer Associates' Chairman and former CEO; Sanjay Kumar, Computer Associates' CEO; and/or Ira H. Zar, Computer Associates' CFO and Executive Vice President of Finance.
It has been alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market before and during the Class Period, thereby artificially inflating the price of Computer Associates common stock. Specifically, it has been alleged that Computer Associates' representations were rendered false and misleading by Computer Associates' failure to disclose that:
(a) beginning not later than May 1999, Computer Associates created
the impression that its revenue growth was sustainable by falsely
claiming that the Company had transitioned from its mainframe
core business to selling software for distributed systems;
(b) starting at the same time, the Company also boosted its revenue
by extending contracts in the middle of their term, booking all
the revenue from the sale of a software license, but not writing
down the revenue from the overlapping period for which the
Company had recognized revenue under the old license, thereby
double-counting revenue for the overlap in the licensing periods;
and
(c) hiding the disastrous drop that has accompanied the contraction
in its sales, the Company instituted a "new business model"
involving sales of flexible subscription agreements instead of
fixed-term licenses, which covered the Company's inability to
continue selling long-term licenses for mainframe software.
The Company engaged in these practices without alerting the market to the actual deterioration in its financial condition. Instead, Computer Associates released non-GAAP-compliant financial results, which used revenue booked in prior periods to obscure a dramatic drop in new sales. These practices are now under investigation by the Securities and Exchange Commission and the U.S. Attorney's office. When news of these investigations emerged in late February 2002, Computer Associates stock lost over one third of its value, falling from its closing price of $25.31 on February 19, 2002 to $15.99 on February 22, 2002.
If you purchased securities in Computer Associates during the Class Period and if you meet certain other legal requirements, you may file a motion in the court where the lawsuit(s) has been filed to serve as a lead plaintiff. You must file your motion no later than April 26, 2002.
Much Shelist is currently investigating these claims. If you purchased Computer Associates securities during the period listed and wish to discuss your rights and interests in any of these matters, or if you have information relevant to any of the lawsuits, you may contact Carol V. Gilden or Michael E. Moskovitz at Much Shelist Freed Denenberg Ament & Rubenstein, P.C., by calling a toll-free number 1-800-470-6824, or by sending an e-mail to investorhelp@muchlaw.com. Your e-mail should refer to Computer Associates.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. The requirements for serving as a lead plaintiff are set forth in the Private Securities Litigation Reform Act of 1995 (15 U.S.C. Section 78u-4).
Much Shelist's history is one of experience, leadership and results. For more than 25 years, Much Shelist has represented plaintiffs in class action litigation in federal and state courts across the United States. The firm has successfully prosecuted cases involving securities fraud, antitrust violations, consumer fraud, unlawful business practices and insurance company fraud. Under Much Shelist's leadership, class members have obtained judgments and settlements in excess of $4 billion.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.