On June 5, 2015, the SEC issued an Order finding that Computer Sciences Corporation ("CSC"), Michael Laphen ("Laphen"), Michael Mancuso ("Mancuso"), Wayne Banks ("Banks"), Claus Zilmer, and Paul Wakefield violated the federal securities laws. The Order stated that from 2009 to 2011, CSC engaged in a wide-ranging accounting and disclosure fraud that materially overstated its earnings and concealed from investors significant problems with its largest contract. Former CEO Laphen approved CSC's use of improper accounting models for the company's multi-billion dollar contract with the United Kingdom's National Health Service ("NHS"). Laphen and former CFO Mancuso also failed to make required disclosures and made misleading statements to investors about the NHS contract. And in one quarter, CSC's former Finance Director for the NHS account prepared a fraudulent accounting model in which he included made-up assumptions to avoid a negative hit to CSC's earnings. As this was occurring in the United States and the United Kingdom, senior CSC finance personnel in Australia fraudulently overstated the company's earnings using "cookie jar" reserves and by failing to record expenses as required. Separately, CSC finance personnel in Denmark engaged in a variety of fraudulent accounting manipulations that also overstated the company's earnings. Throughout this period, CSC's most senior executives and various finance personnel repeatedly failed to comply with straightforward accounting standards and disclosure rules.

Pursuant to the Commission's Order, CSC paid a civil money penalty of $190,000,000; Laphen paid a civil money penalty of $750,000; Mancuso paid a civil money penalty of $175,000; and Banks paid disgorgement of $10,990 and prejudgment interest of $2,400. The Order created a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, for the distribution to harmed investors ("Computer Sciences Fair Fund"). See the Commission's Order.

Additionally, in two related district court actions, defendant William Sutcliffe was ordered to pay disgorgement of $6,003.33 and prejudgment interest of $1,060.62 and Edward Parker was ordered to pay disgorgement of $2,800 and prejudgment interest of $750. SEC v. Sutcliffe, No. 15-cf-4340 (RJS) (S.D.N.Y. Sept. 9, 2015); SEC v. Parker, No. 15-cf-4341 (ER) (S.D.N.Y. Sept. 9, 2015). These payments were paid to the Commission and transferred into the Computer Sciences Fair Fund. In total, $190,948,983.95 was paid into the Computer Sciences Fair Fund.

On July 30, 2015, the Commission appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Computer Sciences Fair Fund.

On June 22, 2016, the Commission appointed Garden City Group, LLC ("GCG") to serve as the Fund Administrator to oversee the distribution of the Computer Sciences Fair Fund to harmed investors.

On April 28, 2017, the Commission approved a Plan of Distribution. See the Commission's Order Approving Plan of Distribution and Plan of Distribution.

On June 6, 2019, the Commission issued an order directing the disbursement of $194,454,692 from the Fair Fund to the Fund Administrator for distribution to harmed investors as provided for in the Plan. See the Commission’s Order: Release No. 34-86046. 

On January 19, 2023, the Commission issued an order approving the disbursement of $7,375,603.44 from the Fair Fund for distribution to eligible claimants, and to 12 otherwise, eligible claimants, who filed claims with the Fund Administrator after the Claims Bar Date, or who were late in curing a rejected claim.  See the Commission’s Order: Release No. 34-96718.

For more information, please contact the Fund Administrator.

Persons to Contact:

Fund Administrator: Garden City Group, LLC
Toll Free Number: (877) 302-1075
Website: www.computersciencesfairfund.com
Email: Questions@ComputerSciencesFairFund.com