May 1, 2009
Is A 35 Day Month Like A Billing Day That Exceeds 24 Hours?
The New York Appellate Division for the Second Judicial Department concluded that summary disbarment was appropriate for a federal felony conviction based on the following admitted facts:
The plea minutes reveal that the respondent served as vice-president and general counsel of a company called Computer Associates. Computer Associates was a publicly-traded company whose business was the licensing of computer software. Purchasers paid a one-time license fee and annual maintenance and usage fees thereafter. The licensing agreement, which required the signatures of both the purchaser and a representative of Computer Associates, had to be signed within the time parameters of a fiscal quarter to be recognized within that quarter as earnings. Revenue predictions were issued quarterly, were made public, and used by stock analysts. The price of shares of stock in Computer Associates depended to a large extent on the estimated earnings of Computer Associates within any given quarter. When it became apparent to senior management that the revenue within a quarter was not going to be sufficient to justify the estimated earnings per share because there were not enough license agreements completed within that quarter, Computer Associates instituted a practice whereby license agreements that had been signed and countersigned after the expiration of a quarter, were backdated or reported as having been completed within that quarter. The practice, known as the "35-day month practice," was carried on systematically in the company. The respondent, who served as vice-president and general counsel of Computer Associates from 1995, admitted that he not only supervised attorneys who routinely engaged in the "35-day month practice," but personally participated in the negotiation or drafting of a backdated agreement in January 2000 and engaged in conduct designed to cover up and conceal the existence of the "35-day month practice" from the investigating authorities.
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