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U.S. Securities and Exchange Commission


Litigation Release No. 20082 / April 19, 2007

Accounting and Auditing Enforcement Release No. 2597 / April 19, 2007

SEC v. Sanjay Kumar and Stephen Richards, 04 Civ. 4104 (E.D.N.Y.)(Glasser, I.L.).

Final Judgment Entered Against Defendant Sanjay Kumar

The Securities and Exchange Commission announced that on April 13, 2007, the United States District Court for the Eastern District of New York entered a final judgment on consent against Sanjay Kumar, the former CEO and Head of Sales at Computer Associates International, Inc., ("CA"). The Final Judgment against Kumar does not impose a civil penalty or disgorgement based on Kumar's obligation to pay restitution payments in the criminal action, United States v. Kumar et ano., S2-04 Cr. 846 (ILG). Kumar consented, without admitting or denying the allegations against him, to a judgment that reincorporates equitable relief previously ordered by the Court, including permanent injunctions prohibiting Kumar and Richards from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a) and 13(b) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-13, and 13b2-1 promulgated thereunder, and an order barring Kumar from serving as an officer or director of a publicly held company.

Previously, on April 24, 2006, Kumar pleaded guilty to eight felony criminal charges in the related criminal case brought by the United States Attorney's Office for the Eastern District of New York. On November 27, 2006, Judge I. Leo Glasser sentenced Kumar to serve a 12 year prison term. On April 13, 2007, Judge Glasser entered a Stipulation and Order in the criminal action imposing a Restitution Judgment against Kumar in the amount of $798,600,000, and directing Kumar to pay $40 million on or before April 30, 2007, $10 million on or before July 31, 2007, and $2 million on or before December 31, 2008. Judge Glasser directed Kumar to pay the balance of the restitution obligation upon release from incarceration by annual payments of 20% of Kumar's income.

On September 22, 2004, the Commission filed complaints alleging that Kumar and violated the anti-fraud and other provisions of the federal securities laws. The Commission alleged that from 1998 to 2000, CA routinely kept its books open to record revenue from contracts executed after the quarter ended in order to meet Wall Street quarterly earnings estimates. In total, CA prematurely recognized over $3.3 billion in revenue. In addition, Kumar obstructed the Commission's investigation into the company's accounting practices.

The Commission acknowledges the assistance and cooperation of the United States Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation in this matter.

For further information see Litigation Releases No. 18552 (January 22, 2004), No. 18665 (April 8, 2004), No. 18891 (September 22, 2004), No. 18954 (November 2, 2004), No. 19730 (June 19, 2006), and No. 19898 (November 3, 2006).



Modified: 04/19/2007