Peregrine Fraud
Peregrine Systems was founded in 1981 in Irvine, California. The founders were Chris Cole, Gary Store, Ed Beck, Kevin Keyes and Richard Diedrich. “The company was focus on developing enterprise solutions that would help organizations address precise business problems, and asset management practices for reduced costs, improved productivity and service and lower risk.” Peregrine Systems was headquartered in San Diego, California and had offices in America, Europe and Asia Pacific.
Peregrine Systems went public in April 1997, and after his first public offering, the company reported seventeen uninterrupted quarters of revenue growth through the quarter ended June 30, 2001.
According to the law suit filed by the Securities and Exchange Commission (SEC), in the United States District Court of San Diego, “the peregrine executives inflated the revenue reported in their filings with the commission and elsewhere.” Executives, business partners and Auditors, used deceit and lies to represent Peregrine Systems as a corporation with constant increasing sales while hiding their persistent failure to achieve revenue forecast. Peregrine executives also sold Peregrine stock to an uninformed market, enriching themselves by millions of dollars, at the cost of the public that invested in the company.
“In February 2003, Peregrine Systems restated its financial statements for eleven quarters during the years 2000, 2001 and 2002, decreasing incomes formerly reported of 1.34 billion by more than$ 507 million.” The center of Peregrine’s fraud consisted in recording revenue on the inappropriate basis of non-binging contracts with resellers (channel partners), a complete violation of Generally Accepted Accounting Principles, – these resellers would purchase Peregrine’s software for resale to end-users. The agreements would not meet the requirements for revenue recognition based on GAAP because the lack of the following: a) evidence of an agreement must exist, b) delivery of
Peregrine Systems went public in April 1997, and after his first public offering, the company reported seventeen uninterrupted quarters of revenue growth through the quarter ended June 30, 2001.
According to the law suit filed by the Securities and Exchange Commission (SEC), in the United States District Court of San Diego, “the peregrine executives inflated the revenue reported in their filings with the commission and elsewhere.” Executives, business partners and Auditors, used deceit and lies to represent Peregrine Systems as a corporation with constant increasing sales while hiding their persistent failure to achieve revenue forecast. Peregrine executives also sold Peregrine stock to an uninformed market, enriching themselves by millions of dollars, at the cost of the public that invested in the company.
“In February 2003, Peregrine Systems restated its financial statements for eleven quarters during the years 2000, 2001 and 2002, decreasing incomes formerly reported of 1.34 billion by more than$ 507 million.” The center of Peregrine’s fraud consisted in recording revenue on the inappropriate basis of non-binging contracts with resellers (channel partners), a complete violation of Generally Accepted Accounting Principles, – these resellers would purchase Peregrine’s software for resale to end-users. The agreements would not meet the requirements for revenue recognition based on GAAP because the lack of the following: a) evidence of an agreement must exist, b) delivery of