Peregrine Won’t Face SEC Fines

The Securities and Exchange Commission said it would not seek monetary damages against Peregrine Systems Inc. for alleged “massive financial fraud.”

The SEC sued Peregrine, a business management software maker in bankruptcy protection, on June 30, alleging the San Diego company had improperly recorded hundreds of millions of dollars in revenue. Peregrine neither admitted nor denied wrongdoing in a partial settlement announced the same day, but the question of returning the proceeds and of possible civil penalties remained open.

The possibility of fines presented complications for the Bankruptcy Court, which began considering Peregrine’s most recent reorganization plan Tuesday in Pittsburgh.

But the SEC told U.S. Bankruptcy Judge Judith K. Fitzgerald Tuesday that it had decided not to pursue damages against Peregrine, even though the complaint filed in the U.S. District Court for the Southern District of California says otherwise.

“That complaint does seek penalties and disgorgement, but the commission has made a determination that it is not going to try to get that relief from Peregrine,” said Daniel Rubenstein, deputy assistant director for the SEC Division of Enforcement.

The agency will file appropriate papers with the federal court in San Diego soon, he said. But the SEC “felt it was appropriate” to let the Bankruptcy Court that is hearing disputes over Peregrine Systems’ proposed reorganization know of its decision.

Peregrine shares, which traded above $79 in March 2000, rose 8 cents to 48 cents in over-the-counter trading.

*

Bloomberg News was used in compiling this report.