11/27/2006ACS Admits Fraudulent Conduct
Speed camera and red light camera vendor ACS admits to ethical misconduct regarding the compensation given to top executives.
Leading photo enforcement vendor Affiliated Computer Services, Inc. admitted today to fraudulent conduct on the part of the company's chief executive officer and chief financial officer. The two executives announced they would step down from their positions after an internal investigation found they had used "intentional misdating of documents" to increase the compensation provided to the top management by millions of dollars. ACS estimated that corrected financial statements will show a difference of $51 million based on a review of option grants between 1994 and 2005.
"The investigation concluded that certain conduct of Mark A. King, the company's chief executive officer, and Warren D. Edwards, the company's chief financial officer, violated the company's code of ethics for senior financial officers," ACS said in a statement.
As a result, Edwards will receive $1 million and King $3.2 million for their current stock options and they will continue to receive a salary during a transition period that ends in June. ACS also implicated former CEO Jeffrey A. Rich.
"The investigation concluded that in a significant number of cases Mr. Rich, Mr. King and/or Mr. Edwards used hindsight to select favorable grant dates," ACS stated.
The Securities and Exchange Commission and the United States Attorney's Office for the Southern District of New York are continuing their own investigations into the financial misconduct.