CSC to pay $190 million to settle SEC accounting probe

Computer Sciences Corp reached a proposed settlement with the U.S. Securities and Exchange Commission over an accounting probe, agreeing to pay a penalty of $190 million and adjust its financial statements for three fiscal years.

CSC, as the company is known, said the "understanding" reached with SEC staff will result in a pretax charge of about $200 million this quarter, which ends Dec. 31. The company said it won't admit or deny the allegations, and the SEC will file an administrative enforcement action alleging violations of securities laws provisions including anti-fraud and reporting.

The technology consultant for governments and companies said the settlement will reduce net income by about $50 million in fiscal 2010 and by about $3.69 billion in 2011, according to a regulatory filing today. Net income for fiscal 2012 will rise by about $3.9 billion, CSC said.

The accounting probe, started in January 2011, initially involved the former managed-services division and focused on the Nordic region. While the SEC investigation was under way, CSC's auditors expanded their own internal investigation to include operations in Australia and a contract with the U.K.'s National Health Service. CSC also said today that it agreed to have an independent consultant review its compliance policies.

Rich Adamonis, a spokesman for CSC, said the company has reached an agreement in principle with the SEC and declined to comment beyond the filing. Judy Burns, a spokeswoman for the SEC, declined to comment.