An investor in Computer Sciences Corporation (Public, NYSE:CSC) has filed a proposed securities class action lawsuit in State Court, Clark County District Court in Las Vegas, Nevada against information technology company Computer Sciences Corp. over the alleged backdating of stock options for executives, employees and directors.
The plaintiff alleges that Computer Sciences Corporation and current and former board members deceived shareholders by failing to disclose that many of the stock options granted from 1997 to 2004 were backdated. Stock option backdating means recipients of the options could earn extra profits by buying stock at prices lower than the market price on the option grant dates. Options typically are awarded to executives to give them an incentive to push a company's share price higher. With an option, an executive can immediately profit by buying a security at the option grant date's low price and then selling it at the current higher price -- assuming the value of the stock has risen.

According to the complaint the proxy statement for the Computer Sciences Corporation annual meeting in 2007 was among the deceptive disclosures provided to shareholders and it was false and misleading because those individual defendants failed to disclose that many of the options that the company had issued were backdated, misdated or mispriced and thus carried exercise prices less than fair market value at the date of the grant,'' the suit charged.

This is reportedly at least the 10th lawsuit or claim to be filed against the company since 2006 over the issue of allegedly backdated stock options. Computer Sciences Corporation (CSC) is engaged in the information technology (IT) and professional services industry. CSC offers an array of services to clients in the commercial and government markets. Its service offerings include IT and business process outsourcing, and IT and professional services. Computer Sciences Corporation has 92,000 employees, is located in Falls Church, VA, and had $16.4995billion in total revenue with a net income of $544.60million in 2007 and $16.7399billion in total revenue with $1.1152billion in 2008. Shares of Computer Sciences Corporation (NYSE:CSC) traded recently at $43.84 per share, down from a 52weekHigh of $50.52 per share. CSC shares reached over $ 61 per share in 2007 and over $90 per share in 2000.