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Stephen Gardner, former chief executive of Peregrine Systems, was sentenced today (Dec. 11) to eight years and one month for his role in the fraud. Gardner's lawyer, Reid Figel, said that Peregrine was engaged in criminal activity before Gardner arrived in 1997. "When he came to Peregrine, this type of activity was the practice," said Figel. "It was the way they did business." Gardner made $8.2 million dumping Peregrine stock. The company's former chairman, John Moores, who was with Peregrine almost from the beginning, dumped nearly $500 million of stock during the fraud period, and $650 million worth, almost all he controlled, during his time with the company. Toward the end, Moores suggested that his personal lawyer, Charles La Bella, be brought in to spearhead a study of what happened. That study was done by the law firm of Latham & Watkins. As stated by creditors in bankruptcy court, the study was a whitewash of Moores. The person who headed the Securities and Exchange Commission's Peregrine probe blessed the Latham & Watkins study, then went to work for Latham & Watkins. The study was used by the U.S. attorney's office as a template in the criminal cases against other Peregrine executives, including Gardner. A San Diego judge would not let this information be introduced in court. Throughout the fraud period, Gardner informed Moores and other board members of the activities going on in the company. But criminal authorities ignored this information, and San Diego judges kept diluting civil suits against Moores and other board members. They have now agreed to pay a total of $55 million to those who were defrauded, but there is a battle among plaintiffs delaying resolution of the matter. The sentencing memorandum in Gardner's case was sealed by the judge, because of "highly sensitive personal information" on the defendant's physical and mental health. Gardner is the brother-in-law of the wife of Bill Richardson, who has been appointed commerce secretary in the upcoming Obama administration. Richardson was a Peregrine board member, and attended meetings at which dubious accounting and other activities were discussed.
Stephen Gardner, former chief executive of Peregrine Systems, was sentenced today (Dec. 11) to eight years and one month for his role in the fraud. Gardner's lawyer, Reid Figel, said that Peregrine was engaged in criminal activity before Gardner arrived in 1997. "When he came to Peregrine, this type of activity was the practice," said Figel. "It was the way they did business." Gardner made $8.2 million dumping Peregrine stock. The company's former chairman, John Moores, who was with Peregrine almost from the beginning, dumped nearly $500 million of stock during the fraud period, and $650 million worth, almost all he controlled, during his time with the company. Toward the end, Moores suggested that his personal lawyer, Charles La Bella, be brought in to spearhead a study of what happened. That study was done by the law firm of Latham & Watkins. As stated by creditors in bankruptcy court, the study was a whitewash of Moores. The person who headed the Securities and Exchange Commission's Peregrine probe blessed the Latham & Watkins study, then went to work for Latham & Watkins. The study was used by the U.S. attorney's office as a template in the criminal cases against other Peregrine executives, including Gardner. A San Diego judge would not let this information be introduced in court. Throughout the fraud period, Gardner informed Moores and other board members of the activities going on in the company. But criminal authorities ignored this information, and San Diego judges kept diluting civil suits against Moores and other board members. They have now agreed to pay a total of $55 million to those who were defrauded, but there is a battle among plaintiffs delaying resolution of the matter. The sentencing memorandum in Gardner's case was sealed by the judge, because of "highly sensitive personal information" on the defendant's physical and mental health. Gardner is the brother-in-law of the wife of Bill Richardson, who has been appointed commerce secretary in the upcoming Obama administration. Richardson was a Peregrine board member, and attended meetings at which dubious accounting and other activities were discussed.