Peregrine execs charged by FBI
'Multi-billion dollar securities fraud'
Eight former executives of Peregrine Software have been charged with conspiracy to commit fraud. An external Arthur Andersen auditor and two business partners of Peregrine face the same charges.
The eleven are accused of manipulating accounts between March 1999 and May 2002 and deceiving the public and investors about the true state of the company. They are accused of: “improperly booking software license revenue on backdated, impaired or sham transactions...fraudulently deceiving financial institutions into extending credit based on false financials [and] concealing Peregrine's mountain of uncollectible accounts”.
Attorney General John Ashcroft said: “The indictment charges these defendants with a massive conspiracy that had at its core one corrupt goal: to hit the numbers quarter after quarter, no matter what. The betrayal of the public trust alleged in this indictment extended from the Chief Executive Officer who headed the scheme to the independent auditor who knowingly certified the company's false financial statements and allegedly made the continuing fraud possible.”
Three former Peregrine executives have already pleaded guilty.
Between its IPO in 1997 and March 2000 Peregrine shares rose from $2.25 to $79.50. Its subsequent collapse saw the loss of $4bn of equity value.
The FBI thanked the Securities and Exchange Commission for its co-operation. The SEC is conducting a parallel civil action against Peregrine. The FBI press release is here. ®
Sponsored: Data Loss Prevention & Data Theft Prevention