Wyly’s Ranger Governance Ltd., a shareholder in the Islandia, New York-based Computer Associates, filed a lawsuit seeking more than $1 billion it claims was paid to executives of the big software maker in cash, stock options and restricted stock based on erroneous financial reporting. The lawsuit, filed in US District Court in Brooklyn, claims the executives received performance-based compensation based on artificially inflated earnings, according to a Wall Street Journal report.
The suit names former chief executive Sanjay Kumar, founder Charles Wang, and 10 other current and former executives. The suit is a derivative action filed on behalf of the company. Thus, Computer Associates would receive the damages if the suit is successful.
In April, Computer Associates restated $2.2 billion of revenue for 2000 and 2001 after an internal probe found sales had been booked prematurely.
This is not the first time Wyly has gone after Computer Associates. Following Computer Associates’ purchase of Wyly’s Sterling Software Inc. in 2000, Wyly waged proxy war in 2001 and 2002, attempting to replace existing company directors with his own slate. While both campaigns failed, Wyly ended the second battle early in exchange for a $10 million payment from the company (See Insiders See Computer Associates Winning Proxy Battle).