Computer Associates International Inc., Islandia, N.Y., faces a federal lawsuit filed by a former employee claiming the company engaged in aggressive accounting practices that inflated the price of the company stock it sold to the $735 million 401(k) plan. The suit was filed last week in U.S. District Court in Central Islip, N.Y.
Some 408,000 shares were sold to the 401(k) plan between March 1999 and March 2000, said Bruce Rinaldi, an attorney with the McTigue Law Firm, which represents the plaintiff. The share price dropped from March 2000 to March 2002, causing the total value of company stock in the plan to fall to $158 million from $309 million two years earlier, according to the complaint.
"We are reviewing the complaint, having learned of it only yesterday," said Bob Gordon, a spokesman for Computer Associates. "An initial reading reveals that it is based on a recycling of essentially the same accounting-related allegations that have been asserted by class-action lawyers for years. These allegations are without merit and we believe will be found to be without merit."