Tuesday, January 27, 2009
Former General Counsel of Peregrine Systems Pleads Guilty to Fraud
Ethisphere Magazine reports that the former General Counsel of Peregrine Systems faces as many as 30 years in prison and up to a $1 million fine after pleading guilty to one count of bank fraud in January. The fraud dates back to 2002 when the company disclosed accounting irregularities that reportedly totaled $500 million in overstated revenue and $3 billion in understated net loss. Richard T. Nelson, the former GC, faces sentencing in April. He will be one of over a dozen former executives and outside consultants that have already pleaded guilty in this case. This group includes former CEO Stephen Gardner who was sentenced to just over eight years in prison. It is samazing that an educated man like Mr. Nelson could rise to the level of being the General Counsel of this large entity and then rationalize, along with a reported 18 others, overstating revenues and understating net loss. The duty to shareholders by executives needs to be reinforced, or perhaps tatooed, on some of these executives heads.