An EDS spokesperson said all Australian contracts, including key accounts in the utility, financial services and government spaces, would operate "as usual" as the investigators examine the company's stock hedging and earnings guidance practices.
The Commonwealth Bank (CBA) - which outsourced its information technology operations to EDS in 1997 in a 10-year, AU$5 billion deal - declined to comment on the ramifications of the probe, citing restrictions on speculation involving partners and suppliers.
However, the news is unlikely to impress CBA chief executive David Murray, notorious throughout the information technology community for his remark in February that the US industry had "single-handedly wrecked the world economy over the past couple of years".
An Australian spokesperson for EDS said the company would continue with recently announced expansion plans. "We have recently announced an expansion of our workforce to cover an increase in our operations in Adelaide and Brisbane, so generally things are fairly positive in the region."
The company's US operations agreed to cooperated fully with the SEC after it received a request for "voluntary cooperation in an informal inquiry" regarding the "purchase and settlement of forward contracts related to its common stock and information regarding events leading up to its recent earnings guidance announcement". In a formal statement regarding the probe EDS in the US said it is confident the inquiry will absolve the company of any wrongdoing.
The SEC is asking for information relating to the EDS' efforts to reduce its costs when employees exercise their stock options, a practice known as hedging stocks which has come under increased scrutiny in the US in the wake of the collapses of WorldCom and Enron. The US government body has also requested information about the events leading up to EDS's recent earnings warning.
The action marks the latest in a string of misfortunes that have hit the computer services company, which is suffering stalling sales in the US.
In mid-September, the company warned its third-quarter earnings would be around 12 cents to 15 cents per share, a dramatic reduction from Wall Street's expectations of 74 cents per share. In addition, EDS last month acknowledged that its stock-hedging efforts backfired and cost the company more than US$200 million.
Shares of EDS were down US$1.59, or about 10.5 percent, to end Wednesday at US$13.50.
