CSC had gone quiet about the SEC investigation into its accounting irregularities in Nordics, Australia and the Managed Services Sector. In fact things were so quiet that many people assumed the investigation had quietly come to a close.
Not at all!
Bloomberg has today reported that certain CSC US and nonUS based employees have received Wells Notices. Fuller details on:http://www.bloomberg.com/news/2013-10-31/csc-shares-tumble-after-employees-receive-wells-notices-from-sec.html?cmpid=street
Wells Notices are often a precursor of the SEC taking enforcement action, which may include legal proceedings, against a company and/or certain employees.
CSC disclosed in 2010 that accounting irregularities had been discovered in its Nordic Region. The amount involved eventually totaled over US$ 90 million. It then announced further irregularities had been found in its Managed Services Sector and Australia.
The SEC announced an investigation into these irregularities, subsequent to which CSC’s Audit Committee announced an independent investigation of its own. Quite why it took CSC’s Audit Committee so many months and the announcement of anSEC investigation to investigate the irregularities is something we found puzzling.
Whatever the Wells Notices turn out to be the precursors of, it is unlikely to be good news for CSC or for the employees involved..