Computer Sciences Corp. ERISA Litigation

In this case three experts filed reports with support from Cornerstone Research. Professor John Peavy of Texas Christian University established that CSC was a viable ongoing company throughout the class period and that the monitoring process that the defendants followed with respect to the plan’s investment options was appropriate. Professor Gordon Klein of UCLA’s Anderson School of Management analyzed CSC’s accounting adjustments and internal controls and concluded that CSC’s accounting adjustments were not material and that CSC’s disclosures were timely and appropriate.

The case was dismissed on summary judgment by U.S. District Judge S. James Otero.

Finally, Dr. Allan Kleidon, a senior vice president of Cornerstone Research, showed that alleged false and misleading statements made to plan participants did not cause artificial inflation in CSC’s stock price and that there was no evidence that disclosures related to CSC’s option dating practices or other tax accounting adjustments were alone associated with statistically significant price declines.

On July 13, 2009, the case was dismissed on summary judgment by U.S. District Judge S. James Otero. The court found that “Plaintiffs offer no evidence that a prudent investor under the circumstances would have acted any differently than Defendants.” In addition, the court concluded that “Plaintiffs have also failed to raise genuine issues of material fact regarding whether the decline was caused by Defendants’ alleged imprudence.”