Fraud
In 2004, a federal grand jury issued an indictment charging eight former executives of Peregrine Systems, Inc., one former outside auditor of Peregrine, and two outside business partners of Peregrine, with conspiracy to commit a multi-billion dollar securities fraud. The case resulted from an investigation by the Federal Bureau of Investigation, and the Securities and Exchange Commission had pursued a parallel civil enforcement action.
In 2003, the U.S. Securities and Exchange Commission charged Peregrine with "massive financial fraud" for the purposes of inflating the company's revenue and stock price. Peregrine, without admitting or denying the allegations of the complaint, agreed to a partial settlement.
Peregrine filed suit against its auditor Arthur Andersen in 2002 for $1 billion in damages, for allegedly allowing incorrect audits that overstated revenues by as much as $250 million to be filed for the 2000-2002 fiscal years. In 2003, the former Peregrine CFO, Matthew Gless, pled guilty to fraud charges. In 2008, the former Peregrine CEO, Stephen Gardner, was sentenced to eight years and one month in prison for his role in the fraud, which resulted in bankruptcy for the company. Although former chairman of the board, John Moores, sold more than $800 million of shares during Peregrine's fraudulent period, the court of appeals determined that there was insufficient evidence that Moores knew about the fraud that led to the company’s bankruptcy.
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Famous quotes containing the word fraud:
“He saw, he wish’d, and to the prize aspir’d.
Resolv’d to win, he meditates the way,
By force to ravish, or by fraud betray;
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Few ask, if fraud or force attain’d his ends.”
—Alexander Pope (1688–1744)