CSC pays $190M to settle 4-year-old accounting fraud case with SEC

CSC will restate its results for 2010 through 2012, and has promised not to violate US antifraud, reporting and accounting laws in future

IT services company CSC will pay US$190 million to settle a case brought by the U.S. Securities and Exchange Commission over four-year-old charges that it violated U.S. antifraud, reporting, and books-and-records laws. The company did not admit guilt, but has promised not to violate those laws in future.

The charges concerned accounting entries relating to CSC's activities in Australia and Denmark, and to the company's contractual relationship with the U.K National Health Service (NHS) over the failed National Program for IT (NPfIT), the company said.

It published details of the settlement Monday, in a filing with the SEC dated Friday.

The company has previously acknowledged accounting irregularities in Australia and Denmark, uncovered in internal audits triggered by the SEC's investigation.

CSC will book a $200 million charge to cover the fine and the cost of compliance. That sum, though, is dwarfed by the disputed $2.75 billion goodwill impairment charge relating to the failed NHS project, of which the SEC ordered CSC to move $2.51 billion to its 2011 financial year from 2012.

That came about partly because CSC overestimated the profit it had made on the partially completed contract. It agreed with the SEC that in future it will assume zero profit from contract revenue accounted for on a percentage-of-completion basis.

As a result of the restatements, CSC's consolidated reports for its financial years from 2009 through 2012 should no longer be relied upon, the company said.

Last month CSC reported results for the second quarter of its 2015 financial year.

For the three months to Oct. 3, it reported revenue of $3.08 billion, down 3.4 percent from a year earlier, and net earnings of $151 million, down from $232 million a year earlier. The company is still carrying $1.68 billion of goodwill on its books. The company's revenue is comes almost equally from three streams: global business services, global infrastructure services, and North American public sector services, with the proportions more or less stable over the past year. The infrastructure services division is struggling compared to the other two, with around half the operating margin of its siblings, and half the value in forward bookings.

Peter Sayer covers general technology breaking news for IDG News Service, with a special interest in open source software and related European intellectual property legislation. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags U.S. Securities and Exchange Commissionbusiness issuescsclegalSEC Filingsfinancial results

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?