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There was another class of victims as well – employees.
Late in September, the company said it would trim its workforce by 800 people, or 5%, in order to pay the 5 million settlement.
When the company stopped the practice at the end of the first quarter of 2001, it fell short of the Wall Street earnings estimate and the share price fell by more than 43% in a single day.
Shares currently trade around , down from more than early in 2000.
In all, the company prematurely reported .3 billion in revenues from 363 software contracts.
This violated Generally Accepted Accounting Principles, or GAAP, which state that revenues should not be counted until both parties have properly signed a contract.
Computer Associates executives are not accused of reporting nonexistent deals or hiding major flaws in the business.
At Computer Associates and many other companies, big portions of executives’ compensation depend on meeting specific goals.
Inflated figures meant Computer Associates executives were paid more than they should have been – extra compensation that came from shareholders’ pockets.
The contracts that were backdated by a few days were real.
Was this really a crime or should it fall under the heading of no-harm, no-foul?