Larry Rodda, a former principal and managing director of KPMG Consulting, has agreed to pay an $80,000 penalty to the Securities and Exchange Commission to settle charges that he deceived investigators over accounting fraud at Peregrine Systems.

The SEC charged Rodda in 2004 with aiding and abetting accounting fraud at Peregrine, a San Diego software company that Hewlett-Packard has since acquired. Rodda signed four bogus software license agreements that enabled Peregrine to record approximately $22 million in revenue from fiscal year 2000 to the third quarter of fiscal year 2002, according to the SEC complaint.

In February 2003, Peregrine restated its financial results for 11 quarters, reducing the $1.34 billion in revenue it had previously reported by more than $507 million. The software license agreements signed by Rodda made it appear that Peregrine had actually sold software to end-users through KPMG Consulting. However, based on side agreements with a Peregrine executive, the SEC said that Rodda knew that his firm would have no payment obligation on the software license agreements. The SEC also claimed that Rodda helped Peregrine conceal the true nature of one of these agreements from Peregrine's auditors at Arthur Andersen when he signed a false audit confirmation.

Rodda pleaded guilty in November 2004 to criminal charges brought by the U.S. Attorney's Office for the Southern District of California, including one count of conspiracy to commit securities fraud, wire fraud, bank fraud and falsification of the books, records and accounts of a public corporation. On Jan. 23, 2008, he was sentenced to six months in prison, six months of home detention and two years of supervised release. He was also ordered to pay a mandatory special assessment. Twelve other individuals - including Peregrine's former CEO and CFO - have pleaded guilty in the criminal case.

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. The settlement is subject to the approval of the U.S. District Court for the Southern District of California.

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