EDS Settles SEC Investigation

PLANO, Texas – Electronic Data Systems has agreed to pay nearly $500,000 to settle an investigation into accounting irregularities alleged to have occurred from 2001 to 2003.

The Securities and Exchange Commission posted the settlement on its Web site Tuesday.

The SEC said EDS failed to disclose the costs of some derivatives contracts, used faulty assumptions to estimate revenue and expenses for a large contracts, and didn’t disclose “an extraordinary transaction” with a major customer that boosted EDS’s reported cash flow by $200 million in 2000.

Also, the SEC said, a former employee made improper payments to officials in India.

In the settlement, EDS neither admitted nor denied wrongdoing.

Plano-based EDS, which runs computer systems and call centers for other companies, had disclosed the proposed settlement in previous SEC filings. The company said the terms of the settlement wouldn’t have a material financial impact.

“We are pleased that the investigation is resolved and that we can put these historical matters behind us,” said EDS spokesman Bob Brand.

Shares of EDS fell 42 cents, or 1.9 percent, to $21.61 in afternoon trading.