Ex-Computer Associates CEO Kumar Pleads Not Guilty

Former Computer Associates International Inc. (CA) Chief Executive Sanjay Kumar (search) pleaded not guilty Thursday to charges of securities fraud and obstruction of justice stemming from a two-year investigation into accounting fraud at the software company.

Kumar's arraignment in U.S. District Court in Brooklyn, N.Y., came a day after the company agreed to pay $225 million to past and current shareholders to settle charges the company improperly booked $2.2 billion in revenue.

Stephen Richards, the former global head of sales for the company, also pleaded not guilty to fraud and obstructioneys Wednesday and said he expects to be exonerated.

A U.S. district court judge Wednesday approved an agreement that allows the company to avoid prosecution if it pays a fine and puts a number of remedial policies in place within 18 months.

Shares of Computer Associates were up $1.67, or 6.6 percent, to $26.97 on the New York Stock Exchange (search).