CA moves to settle shareholder litigation

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The company will issue up to 5.7 million shares of CA common stock to its shareholders, and the company said in return it is confident it can resolve current shareholder and ERISA class-action suites.

The company will take a charge in its current financial quarter of $144m.

CA chairman and chief executive officer Sanjay Kumar said the decision was made despite CA being confident that it could win a legal battle.

He said in a statement: ‘While confident in our position, the board of directors concluded that a settlement – especially one that puts more equity in the hands of shareholders – was the best course of action.

‘It became clear that it was a far better option than continuing with the expense and distraction of a protracted legal battle that began five years ago,’ he added.

The settlement has been approved by the board’s independent directors and will be submitted for approval to the US District Court for the Eastern District of New York.

CA said the settlement of these cases is separate from the continuing and investigations by the Securities and Exchange Commission and the US Attorney’s Office for the Eastern District of New York.

It is cooperating with those investigations and ‘continues to respond to requests from those agencies, and the board continues to exercise oversight and review of these issues,’ but said it is unable to predict the outcome of the government investigations.

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