CSC Shares Tumble After Employees Get Wells Notices From SECNick Turner
Computer Sciences Corp., a provider of technology consulting to governments and companies, fell the most in more than five months after signaling that an accounting probe by the Securities and Exchange Commission is escalating.
As part of an almost three-year investigation by the SEC, former U.S. executives, along with some current employees outside the country, have received Wells notices from the commission, CSC said today in a filing.
The SEC sends a Wells notice to notify that investigators may recommend an enforcement action. Typically, the company or individual under investigation has a chance to respond to the allegations before regulators seek authorization from the SEC’s five-member commission to pursue sanctions.
CSC shares fell 4.5 percent to $49.26 at the close in New York. The stock has climbed 23 percent this year.
John Nester, an SEC spokesman, declined to comment.
Chief Executive Officer Mike Lawrie, who took the reins last year, has been leading a turnaround effort at the Falls Church, Virginia-based company, which has struggled with years of declining sales.
The accounting probe initially involved the company’s former Managed Services Sector division and focused on the Nordic region. Eventually CSC’s auditors expanded their internal investigation to include operations in Australia, its Americas outsourcing business and a contract with the U.K.’s National Health Service. As part of the effort, CSC wrote down its investment in the U.K. contract last year by almost $1.5 billion.