A group led by Texas investor Sam Wyly, who lost a proxy fight against Computer Associates International Inc. three years ago, has filed a lawsuit seeking more than $1 billion paid to executives at the software company.
Wyly's group, Ranger Governance Ltd., seeks to recover cash, stock and options that were given to 12 current and former executives at the company, which is under investigation for false financial reporting.
The defendants include Charles Wang and Russell Artzt, who co-founded the company, and former chief executive Sanjay Kumar. Wyly tried to oust Wang and Kumar from the board.
The lawsuit was filed Tuesday in U.S. District Court in Brooklyn, N.Y.
Ranger said it brought the case on behalf of Computer Associates and would give any money it recovered to the company.
Dan Kaferle, a spokesman for Computer Associates, said the company was reviewing the lawsuit and the board of directors was continuing to review compensation given to executives who are part of the government investigation.
A lawyer for Computer Associates, Robert J. Giuffra Jr., said Ranger's lawsuit violated a 2002 agreement under which Wyly took $10 million to end his proxy fight and not launch another for five years.
Computer Associates, based in Islandia, N.Y., has been tainted by accounting irregularities that have led to four guilty pleas from top executives. Days after Kumar resigned as CEO and chairman in April, the company restated its earnings from 2000 and 2001 to reflect $2.2 billion in improperly booked revenue.
Kumar, the hand-picked successor to founder Wang, and Artzt came under fire after they shared a stock bonus worth $1.1 billion just months before the company warned of a slowdown in business.
Wyly became a major Computer Associates shareholder when he sold Sterling Software Inc. to CA in 2000.
