The lawsuit stemmed from a massive accounting scandal at Peregrine, which ultimately led to a $500 million financial restatement. The shareholder class action lawsuit alleged that the defendants made materially false and misleading statements in public filings, press releases, and other investor communications from July 22, 1999 through May 3, 2002, resulting in Peregrine securities trading at artificially inflated prices. After Peregrine filed for bankruptcy protection in September 2002, Sol Cera of Gold Bennett Cera & Sidener LLP together with co-counsel pursued claims in the Bankruptcy Court, which led to a significant recovery for shareholders. The case also proceeded against several officers and directors of Peregrine, as well as Peregrine's former auditor, Arthur Andersen. Several former Peregrine officers, including the CEO and CFO, have pled guilty to criminal charges related to the accounting scandal.
It is expected that a distribution of the recovery will occur in the first quarter of 2010. The lawsuit, in re Peregrine Systems, Inc. Securities Litigation, is pending in the United States District Court for the Southern District of California (case no. 02-cv-870 BEN (RBB).