Electronic Data Systems will pay $500,000 to settle an
investigation into accounting irregularities.
The Securities and
Exchange Commission posted the settlement on its website saying that EDS
failed to fully disclose the costs of some derivatives contracts.
The
company used faulty assumptions to estimate revenue and expenses for a large
contracts and didn't adequately disclose "an extraordinary transaction" with
a major customer that boosted EDS's reported cash flow by $200 million in
2000.
SEC did not like the fact that a former employee bribed officials
in India. As part of the settlement, EDS neither admitted nor denied
wrongdoing although one wonders why they paid $500,000 if they had done
nothing.