Settlement Of Computer Associates Accounting Fraud Investigation Could Be Near

The possible settlement, which could include an infrequently used form of probation called "deferred prosecution," could come within days, The Wall Street Journal reported Monday.

Computer Associates, based in Islandia, N.Y., restated two years of earnings in April, admitting it wrongly booked $2.2 billion in revenue. One accounting trick the board has acknowledged was called the "35-day month," in which employees inflated revenue by closing quarterly books a few days late.

The Justice Department and the Securities and Exchange Commission have been investigating the company's accounting practices. Four executives, including its former chief financial officer, have pleaded guilty to fraud or obstruction of justice. The company's former chief executive, Sanjay Kumar, left in June. Earlier this year, the company said it had offered the government $10 million to settle the investigations.

The possible settlement being discussed could include a financial penalty and the appointment of an independent monitor who will oversee its accounting, the Journal reported.

Deferred prosecution would give prosecutors a way to monitor the company's behavior without filing criminal charges against it. An indictment of the company would mean it could not do some business with the federal government. The possibility of a deferred prosecution was reported by Newsday earlier this month.

The company has "no update on the investigation at this point" and no comment on the Journal story, said Shannon Lapierre, a Computer Associates spokeswoman. Shares of Computer Associates fell 17 cents to close at $25.53 Monday on the New York Stock Exchange.