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Tech Industry

Ex-CA chief pleads not guilty to fraud

Sanjay Kumar and another former Computer Associates executive fight charges stemming from accounting practices.

NEW YORK--Former Computer Associates International Chief Executive Sanjay Kumar pleaded not guilty on Thursday to charges of securities fraud and obstruction of justice stemming from a two-year investigation into accounting fraud at the software company.

Kumar's arraignment in U.S. District Court in Brooklyn, New York, came a day after the company agreed to pay $225 million to past and current shareholders to settle charges that the company improperly booked $2.2 billion in revenue.

Stephen Richards, the former global head of sales for the company, also pleaded not guilty to fraud and obstruction charges.

The two former executives were charged in a 10-count indictment returned by a grand jury on Friday and unsealed Wednesday.

Kumar denied wrongdoing in a statement issued by his attorneys Wednesday and said he expects to be exonerated.

A U.S. district court judge Wednesday approved an agreement that allows the company to avoid prosecution if it pays a fine and puts a number of remedial policies in place within 18 months.

Shares of Computer Associates were up $1.67, or 6.6 percent, to $26.97 in midday trade on the New York Stock Exchange.

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