(c) 1995 Copyright The News and Observer Publishing Co.
(c) 1995 Associated Press
IRVINE, Calif. (Oct 12, 1995 - 09:48 EDT) -- An auditing firm and five
former officers of a software company agreed to pay $15 million to
settle a shareholder lawsuit claiming they defrauded investors by
inflating sales figures.
The settlement follows an earlier agreement that called for Platinum
Software Corp. to give shareholders $17 million in cash and notes.
Investors filed a class-action lawsuit in January 1994.
The defendants admitted no wrongdoing.
"This was an economic decision," said Dick Poladian, Southern
California managing partner for auditor Arthur Andersen & Co. "We
maintain that the work we did was high quality."
Also settling were former Platinum executives Jon Erickson and Mark S.
Tague and three company founders -- Gerald Blackie, Timothy McMullen
and Kevin Riegelsberger, The Orange County Register reported Wednesday.
"All I can say is that we're happy the case has been resolved," said
McMullen's attorney, Robert Gooding.
The payments will be distributed after the agreement is approved by a
federal judge, said Helen J. Hodges, a shareholders' attorney.
An outside audit in April 1994 revealed irregularities in
sales-reporting practices, and key Platinum executives later resigned.
The resignations stunned Wall Street because Platinum was seen as a
software industry success, with 143 percent sales growth in 1993.
For the fiscal year ended in June, Platinum reported a net loss of $5.7
million on $56.2 million in sales.