Ranger Governance, the corporate governance wing of Wyly's investment firm, has filed suit against Computer Associates and a dozen of its existing and former employees, seeking to recoup more than $1bn (£550m) in compensation paid to top executives while CA perpetrated an accounting fraud.
Ranger's suit is a derivative action, a type of suit brought on behalf of a company by shareholders who believe the company's directors are not properly protecting the company's interests.
The lawsuit seeks reimbursements from the 12 defendants, but seeks no money from CA. Any financial judgment awarded in the case would be paid to CA. Ranger has also asked the court to award a judgment covering its costs in bringing the lawsuit.
Ranger's lawsuit targets former CA chief executives Charles Wang and Sanjay Kumar, along with the four former finance department employees who have already pleaded guilty to charges including securities fraud and obstruction of justice. Also among the dozen named in Ranger's complaint are two existing CA employees, co-founder and executive vice-president Russell Artzt and Gary Quinn, a former top sales executive who now heads CA's partner initiatives.
The case stems from CA's admission of a scheme that led to improper booking of $2.2bn in revenue over a period of nearly two years, as part of an effort to artificially inflate the company's quarterly sales reports.
CA recently completed a two-year internal investigation of the fraud and restated results from its 2000 and 2001 financial years. It also shed more than a dozen executives directly connected with or implicated in the fraud.
CA and several of those former executives remain the subjects of an ongoing government investigation expected to lead to further criminal and civil charges.
This lawsuit criticises CA's board for not seeking to recover salary and performance-based compensation from executives involved in the accounting fraud.
"The majority of the directors is not motivated to discover the extent of the corruption at CA," the complaint said. "The board of directors has failed to 'do the right thing,' and has allowed Wang, Kumar and the other defendants to retain their undeserved wealth while letting the scandal of CA's corruption fade into unpleasant memory."
CA said that it "is continuing to review the matter of compensation given or due to the individuals subject to the government investigation".
A spokesman declined further comment on the lawsuit.
Stacy Cowley writes for IDG News Service