NEW YORK, March 15, 2002 (PRIMEZONE) -- Please take notice that the law firm of Kirby McInerney & Squire, LLP has commenced a class action lawsuit in the United States District Court for the Eastern District of New York on behalf of all purchasers of certain Computer Associates (NYSE:CA) securities, including common stock, during the period from May 28, 1999 through February 25, 2002 (the "Class Period").
A copy of the complaint is available from the Court or from Kirby McInerney & Squire. Please visit our Website, which offers summary and detailed information concerning the case at www.kmslaw.com/new_cases/computer_associates/ca.htm, or contact us by phone at (888) 529-4787 or by email at obraun@kmslaw.com.
The action charges Computer Associates, as well as its Chairman, Chief Executive Officer and Chief Financial Officer, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. These violations, the complaint alleges, stem from defendants' materially false and misleading statements during the Class Period that, as detailed below: (i) misrepresented the Company's business, operations and financial performance; and (ii) caused the Company's shares to trade at artificially-inflated prices.
The complaint alleges that, during the Class Period, Computer Associates' public statements and representations were rendered false and misleading by certain accounting and sales practices involving how and when Computer Associates would recognize revenue. These practices, as described in detail in the complaint, and as discussed in the Wall Street Journal and the New York Times, are now under investigation by the Securities and Exchange Commission (the "SEC") 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 a February 22, 2002 closing price of $15.99.
According to the complaint, 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. Simultaneously, as the complaint alleges, the Company inflated its reported 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. In an attempt -- according to the complaint -- to hide the severe revenue decline Computer Associates was actually experiencing, defendants instituted a "new business model" involving sales of flexible subscription agreements instead of fixed-term licenses (which shift was intended to disguise the Company's inability to continue selling long-term licenses for mainframe software). Computer Associates engaged in these practices without alerting the market to the actual deterioration in its financial condition, and by releasing non-GAAP-compliant financial results which used revenue booked in prior periods to obscure a dramatic drop in new sales.
Plaintiffs are represented by Kirby McInerney & Squire, LLP, which specializes in complex litigation, including securities class actions. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general or about the role of the lead plaintiff in a securities class action can be obtained through Kirby McInerney & Squire's Website at www.kmslaw.com.
If you are a member of the class described above, you may, no later than April 26, 2002, move the Court to serve as lead plaintiff of the class, if you so choose, pursuant to the Private Securities Litigation Reform Act of 1995 (the "PSLRA"), 15 U.S.C. section 78u-4(a). A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. 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 seek appointment as a lead plaintiff. For more information about the case, its claims, and your rights, please contact:
Ira M. Press, Esq. Orie Braun KIRBY McINERNEY & SQUIRE, LLP 830 Third Avenue, 10th Floor New York, New York 10022 Telephone: (212) 317-2300 or Toll Free (888) 529-4787 E-Mail: obraun@kmslaw.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca