Computer associates backdating contracts

This material may not be published, broadcast, rewritten, or redistributed.

Rewritten contract or backdating fraud happens when a dealership has you sign a new contract for the purchase or lease of a vehicle, and then backdates the newer contract to the date of the first contract.[DITN = Desis In The News] Major news from the world of corporate crime: Sanjay Kumar, former CEO of Computer Associates (at one time, the world's second-largest software company) and co-owner of the New York Islanders hockey team has been sentenced to 12 years in prison.

computer associates backdating contracts-42

CA also said that the audit committee is "nearing completion" of its probe and was mulling a restatement of financials.

The Securities and Exchange Commission claims the former finance executives help CA improperly record about $1.4 billion worth of revenue in the 2000 fiscal year, which ended March 31, 2000, the Journal reported.

Because of the inflated revenue reports, the company’s stock price went up – until the truth came out, which eventually drove the company into bankruptcy.

(We’ve all seen that particular movie in the past couple of years, eh?

Earlier this month, David Rivard, 36, former vice president of finance at Computer Associates, pleaded guilty in Federal District Court in Brooklyn, admitting to obstructing the government's investigation of accounting irregularities at the company and conspiring to commit securities fraud, the New York Times reported at the time.

Also this month, the company's former chief financial officer, Ira Zar, pleaded guilty to securities fraud and other charges.

In either case, the result could be that the contract is given a date that is different from the date that would have been used if the person signing had put in the actual date and promptly returned the signature page.

This could be more of a nuisance than playing games with the date in the introductory clause—the date you use in the introductory clause is something the parties have to agree on, whereas someone signing a contract has unfettered discretion to give their signature whatever date they want. But the simplest fix would be to use a signature-automation solution such as Echo Sign or Docu Sign.

Sometimes certain claims (such as insurance claims) can be backdated if the could not be completed at an earlier date, although there must be good reason for neglecting to claim in advance.

Tags: , ,