- Richard Grasso, head of the New York Stock Exchange and
a leading advocate of corporate governance reform, failed to disclose his
stock ownership properly to financial regulators.
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- Mr Grasso and several other directors of Computer Associates
did not file annual reports with the Securities Exchange Commission over
the last five years noting their stock awards from the company, according
to the company's recent proxy filing.
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- Computer Associates claimed Mr Grasso's failure to file
was the result of a misinterpretation by the company's legal department.
Mr Grasso has since sent the proper documents to the SEC.
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- The episode is a reminder that even the most sophisticated
executives can be tripped up by the tangles of securities regulations.
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- Mr Grasso is not the only high-powered Computer Associates
director who failed to file the document, known as a Form 5, with the SEC.
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- Former US Senator Alfonse D'Amato, who chaired the banking
committee, and three other board members were also noted in the Computer
Associates proxy. The directors' failure to file was first reported by
Bloomberg News.
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- Mr Grasso has become one of the most vocal proponents
of corporate reform amid the current wave of accounting and other white
collar crimes as he tries to revive investor confidence in the markets.
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- Mr Grasso's spokesman at the NYSE declined to comment.
Computer Associates said the mistake was merely a "technicality"
that would have no impact on its financial reports.
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- "Because director compensation is deferred until
retirement, we and our directors did not believe that a Form 5 filing was
necessary," it said, explaining the error. The disclosure is embarrassing
for Computer Associates because the company has been working hard to burnish
its image under its new lead independent director, Lewis Ranieri.
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- Mr Ranieri is best known for his days at Salomon Brothers,
where he pioneered mortgage-backed securities during the period immortalised
by Michael Lewis' book "Liar's Poker".
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- Mr Ranieri has said he joined the Computer Associates
board at the behest of Mr Grasso and Mr D'Amato.
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- The company's recent proxy statement bears the hallmarks
of the corporate reform that Mr Grasso has trumpeted.
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- There are eight pages dedicated to spelling out new corporate
governance standards.
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- Among other things, they maintain that directors should
attend all board meetings and should approach their assignments with "independence
and integrity."
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- © Copyright <javascript:void 0>The Financial
Times Limited 2002
- http://news.ft.com/servlet/ContentServer?pagename=F
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