Peregrine Systems, Inc.
In re Peregrine Systems, Inc. Securities Litigation, No. 02 Civ. 870-BEN (S.D.Cal.)
AF&T served as Co-Lead Counsel in the securities class action filed on behalf of a class of investors who purchased or acquired the securities of Peregrine Systems, Inc. (“Peregrine”) during the Class Period of July 22, 1999 through May 3, 2002, and were damaged thereby.
Despite Peregrine’s entering into bankruptcy protection, AF&T and its client obtained a $117.5 million recovery for harmed investors, including $65 million from Peregrine’s corporate officers and directors, representing one of the largest settlements from individual defendants in a case of this nature.
On January 30, 2003, the Honorable Napoleon A. Jones, Jr., of the United States District Court for the Southern District of California, appointed AF&T as Co-Lead Counsel for the Class. Lead Plaintiffs alleged violations of federal securities laws by Peregrine, certain of Peregrine’s officers and directors, and Arthur Andersen (and its related entities) who served as Peregrine’s outside auditors during the Class Period.
At the time, Peregrine was a software company that generated revenues through product licensing to retailers, distributors and end-users; and by providing software support and servicing. During the Class Period, Peregrine improperly recognized revenue in excess of $500 million and improperly accounted for a number of other items, as reported in its false and misleading financial statements filed with the Securities and Exchange Commission and released to the public.
On April 5, 2002, Peregrine issued a press release announcing that it was firing Arthur Andersen as its outside auditor. Later that month, Peregrine announced that it would need to delay the release of its quarterly financial results. On May 6, 2002, the company announced the discovery of accounting irregularities and the commencement of an internal investigation into the company’s accounting practices.
Over the next few months, Peregrine revealed a number of accounting improprieties, leading to a restatement of its financial statements for the fiscal years of 2000, 2001 and 2002, and driving the company into bankruptcy on September 22, 2002.