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Peregrine Figure Agrees to Pay Fine

Larry Rhodda, a former KPMG Consulting principal and managing director involved in the Peregrine Systems accounting scandal in San Diego, agreed to pay an $80,000 fine to settle charges filed in 2004 by the Securities and Exchange Commission, the agency said Feb. 6.

Rhodda and eight other defendants were named in a complaint filed by the SEC with multiple counts of fraud and other felonies in connection to the fraudulent reporting of revenues from Peregrine’s software covering about three fiscal years from 1999 to 2002.

The fraud that was first revealed in 2002 eventually drove the company to filing for bankruptcy that same year, and resulted in a dual federal investigation by the Department of Justice and the SEC.

The bankruptcy caused the loss of more than $4 billion in shareholder equity, according to a federal indictment.

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According to the SEC, Rhodda was instrumental in setting up sham license agreements that made it appear Peregrine was selling to end users through KPMG Consulting when in fact, Rhodda knew his firm was not obligated to pay for the software licensing.

Rhodda pleaded guilty in November 2004 to one count of conspiracy to commit securities fraud, wire fraud, bank fraud and falsification of the books, records and accounts of a public corporation. On Jan. 23 he was sentenced to six months in prison, six months of home detention and two years of supervised release.

Twelve other defendants in the Peregrine case, including former CEO Stephen Gardner, have pleaded guilty to various felonies in the case.

Peregrine, which was formerly chaired by Padres owner John Moores, was sold to Hewlett-Packard Co. in 2006 for $425 million.

, Mike Allen

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