Contact Information: Media Contact: Ashley Kanigher 650-843-5721 akanigher@cooley.com
Cooley Achieves Major White Collar Victory
| Source: Cooley Godward Kronish LLP
SAN DIEGO, CA--(Marketwire - March 21, 2008) - Cooley
Godward Kronish LLP achieved a major trial victory in San Diego federal
court yesterday on behalf of client Daniel F. Stulac, one of the first
outside auditors in the post-Enron era to go to trial against allegations
of direct collusion with corrupt management. The jury announced yesterday
that it was deadlocked following the six-week trial, with six jurors
voting not guilty on all charges. Mr. Stulac faced a maximum of 30 years
in prison if convicted.
Mr. Stulac, formerly a partner of the former Big 5 accounting firm Arthur
Andersen LLP, was charged in October 2004 by the U.S. Attorney's Office in
San Diego with securities fraud, wire fraud and bank fraud in connection
with the financial reporting of Peregrine Systems, Inc. Peregrine was a
San Diego-based software company that filed for bankruptcy in 2002 after it
announced that it was conducting an internal investigation of possible
misstatements in previous financial reports. The investigation resulted in
the resignations of Peregrine's CEO and CFO. At the time of the indictment
against Mr. Stulac and ten other defendants, the U.S. Attorney described
the case as "the largest fraud in the history of the Southern District of
California."
Cooley's team, led by San Diego-based partner Michael
Attanasio, successfully defended Mr. Stulac against allegations that he
and others directly conspired with Peregrine's management to manipulate
earnings and deceive investors. With six jurors voting not guilty, the
twelve-member jury declined to find that Mr. Stulac was involved in the
alleged Peregrine conspiracy. The Cooley team presented overwhelming
evidence that Mr. Stulac and his audit team were misled by Peregrine's
management and were unaware of the fraud perpetrated by Peregrine's CEO,
CFO, Controller and others. The jury rejected the Government's claims that
Mr. Stulac directly colluded with management, participated in a cover-up,
and in doing so, lied to his own audit team and partners.
Last August, following a three-month trial, a jury was deadlocked with
eight votes favoring acquittal of Cooley's client Mr. Stulac on all counts.
The U.S. Attorney determined to retry Mr. Stulac in a trial that began
earlier this year and concluded with yesterday's mistrial.
"This win is symbolic because it sends a message to the Justice Department and the SEC that they cannot overreach in financial
fraud cases in the post-Enron era," said Mr. Attanasio. "It is one thing
to say that an auditor was associated with a company that was cooking its
books; it is quite another to prove that he was knowingly involved in the
fraud," Mr. Attanasio explained.
"The government fell far short of its burden on the latter claim and this
chapter of the Peregrine case should now be put to bed," Mr. Attanasio
said.
Between 2002 and 2004, the FBI and the United States Attorney for the
Southern District of California conducted an investigation of Peregrine.
Eleven former Peregrine officials and business partners have pled guilty to
various charges, including securities fraud, wire fraud, bank fraud,
conspiracy, falsifying books and records, and obstruction of justice. Mr.
Stulac, along with former Peregrine executive Patrick Towle, are the only
defendants to go through two trials without being found guilty of a single
count.
Cooley's litigation team, led by Mr. Attanasio, included attorneys Aaron
Arnzen, Trent Packer, Samantha Everett and Joe Leventhal.
About Cooley's Litigation Practice
Cooley's 300-lawyer litigation department represents many global
businesses, particularly in the technology and life sciences sectors, in
high-profile trials and major litigation matters in state and federal
venues across the country. The Firm has one of the largest patent and IP
litigation practices in the country. Cooley litigators also handle a wide
range of
white collar, regulatory and governmental enforcement matters, and have
depth in
securities litigation, antitrust, a wide range of consumer class
actions, bankruptcy, tax controversy, employment and commercial litigation.
Last year The National Law Journal named Cooley's litigation department to
its prestigious "Defense Hot List." This recognition validates the Firm's
growing reputation as a "short list" choice of general counsel and boards
of directors in the most important matters and disputes facing their
companies.
About Cooley Godward Kronish LLP
Cooley Godward Kronish's 650 attorneys have an entrepreneurial spirit and
deep, substantive experience, and are committed to solving clients' most
challenging legal matters. From small companies with big ideas to
international enterprises with diverse legal needs, Cooley has the breadth
of legal resources to enable companies of all sizes to seize opportunities
in today's global marketplace. The Firm represents clients across a broad
array of dynamic industry sectors, including technology, life sciences,
financial services, retail and energy.
The Firm has full-service offices in major commercial, government and
technology centers nationwide: Palo Alto, CA, New York, NY, San Diego CA,
San Francisco, CA, Reston, VA, Broomfield, CO, Washington, DC and Boston,
MA.
For additional information about the Firm, please visit www.cooley.com.