Only days after a Delaware judge ordered three top executives of Computer Associates International to return more than a half-billion dollars worth of stock, a federal judge on Long Island has denied the executives’ motion to dismiss securities fraud claims brought by a class of shareholders who bought the company’s stock last year.
Eastern District Judge Thomas C. Platt ruled Monday in In re Computer Associates Class Action Securities Litigation, 98-CV-4839, that the plaintiff shareholders had adequately pleaded their claims to allow the case to go forward. Plaintiffs claim that Charles Wang, Computer Associates’ chief executive officer and chairman of its board of directors, Sanjay Kumar, its president, and Russell M. Artzt, the company’s executive vice president, had violated �10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 by artificially inflating the company’s revenues to push up the stock price and trigger a $1.15 billion executive compensation package for themselves.
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