Computer Associates International Inc. (NYSE: CA) has announced that it will issue up to 5.7 million shares to obtain a global settlement of the securities class actions, ERISA class actions, and derivative litigation pending against the company. (There may be a cash component to the settlement, however, depending on the share price of the stock at the time of distribution.) The cases are based on how Computer Associates, which makes software from corporate mainframe computers, recognized revenue and awarded executive compensation. In anticipation of the settlement, the company plans to take a pre-tax charge of approximately $144 million in the current quarter.
Quote of note: According to an Associated Press article, lead counsel for the plaintiffs stated “that getting stock today, if the company has a good future, has a better upside for our clients than waiting three, four, or five years to resolve the case.”
The 10b-5 Daily 