February 6, 2008
Former KPMG Consulting Managing Director Settles Peregrine Fraud Charges
The SEC settled an enforcement action against a former principal and managing director of KPMG Consulting LLC for his role in deceiving investors in a major corporate accounting fraud. Larry A. Rodda was charged by the SEC in 2004 with aiding and abetting a massive financial fraud orchestrated by senior officers at Peregrine Systems, Inc., a San Diego software company that has since been acquired by Hewlett-Packard Company. According to the SEC's complaint, Rodda knowingly signed four sham software license agreements that allowed Peregrine to improperly record approximately $22 million in revenue. Rodda has agreed to pay an $80,000 financial penalty to settle the SEC's charges.
According to the SEC's complaint, Rodda and eight other defendants fraudulently inflated the product revenues Peregrine reported in SEC filings and elsewhere from its fiscal year 2000 through the third quarter of its fiscal year 2002. In February 2003, Peregrine restated its financial results for 11 quarters, reducing previously reported revenue of $1.34 billion by more than $507 million.
Rodda pleaded guilty in November 2004 to criminal charges brought by the U.S. Attorney's Office for the Southern District of California. Without admitting or denying the SEC's allegations, Rodda agreed to be enjoined from violating the antifraud provisions of the Securities Exchange Act of 1934 in addition to paying the financial penalty.
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