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Newsday, August 8, 2007 article



Judge's ruling a setback for CA shareholder Wyly

August 8, 2007

A federal judge delivered a potentially fatal blow last week to dissident CA Inc. shareholder Sam Wyly's efforts to pursue financial claims against current and former CA officials, rejecting Wyly's central request to re-open a shareholder settlement reached in 2003.

The settlement relieves current and former executives and directors of the software company of legal liability in the case, preventing them from being sued for so-called ill-gotten gains.

In an Aug. 2 ruling a day after a testy court conference, Judge Thomas Platt ruled that Wyly failed to provide evidence contained in 23 boxes of late-discovered documents that proved fraud beyond what already had been acknowledged by the company.

"The years following this settlement have only brought further delay and a multitude of allegations of fraud with very little, if any, connection to the 23 boxes," Platt wrote in a ruling last week. "At this point, these claims fly in the face of the finality which a settlement is intended to produce. While our system of justice does not tolerate a fraud upon the court, it also does not permit two bites at the apple."

Lawyers for Wyly in two separate suits have charged that the discovery of the 23 boxes late in the case effectively nullified the settlement. The settlement netted shareholders 5.7 million shares valued at more than $140 million, a payout Wyly and his Ranger Governance group rejected. Shareholders, Wyly lawyers say, should have received much more - closer to $1 billion.

In a filing late last month, they noted the documents provided evidence of several other fraudulent accounting practices in addition to charges to which CA officials ultimately pleaded guilty. They called a report by a committee of CA's board a "whitewash" - a claim CA has denied. And Wyly lawyers have charged that CA's main legal representative during settlement was Steven Woghin, the chief counsel who ultimately pleaded guilty to obstruction of justice and conspiracy in the case.

"We're very disappointed," said Wyly attorney William Brewer, principal at the firm Bickel & Brewer in Manhattan. "With all due respect to his honor [Platt], we think the evidence and the record is ample and in fact far exceeds" the standard for re-opening the settlement.

He said Wyly, if necessary, "will seek to have that order reversed" on appeal.

In a letter this week to CA lawyers, Brewer noted that the judge's decision also had "significant impact" on CA's attempts to pursue claims against former CA executives who a committee of the board charged were in part responsible for the accounting fraud at CA. One of them, CA founder Charles Wang, vigorously denied any connection to the schemes outlined in a committee report in the spring.

Brewer, in his letter, recommended that Wyly's Ranger Governance and the committee issue a joint submission to Platt asking for reconsideration. It's unclear whether the committee will cooperate.

A CA spokesman declined to comment on the judge's ruling or the case, "since the matter is still in litigation."





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