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— San Francisco attorney Robert C. Friese, a court-appointed attorney, will submit an appellate writ to reverse Lewis's ruling that Delaware incorporation outweighs California's ability to assert its laws. Meanwhile, he will pursue the other claims in the suit.

However, in federal court on March 30, Judge Roger T. Benitez issued an opinion on a case that consolidates 31 individual cases. Despite the board's knowledge of Peregrine's dubious accounting and failing business, as well as its knowledge of a pending merger that would affect the stock, Benitez repeatedly declared that there was no intent to deceive. Although directors such as Moores reviewed misleading news releases and signed untrue filings with the government, the judge saw no intent to deceive. Moores's stock sales "do not appear unusual or suspicious," says Benitez, even though Moores dumped 94 percent of the stock he owned during the period the books were cooked. At another point, the judge avers, "Moores received at most $53 per share -- far below the peak price of $79." Huh? Does the judge think everybody sells at the peak? The plaintiffs brought forth convincing evidence that Moores essentially ran the company. Benitez didn't find it sufficient.

He did find evidence of negligent board performance. He could hardly have found otherwise. But that only helps people who got Peregrine stock as a result of a Peregrine acquisition. "Under both the federal and state rulings, people who acquired their stock directly have no claim," says Sol B. Cera, the San Francisco attorney handling the case. He will appeal or amend the case. "The wrongdoing is too serious. The idea that there is no vehicle for the injury suffered is unacceptable. We will fight as long and hard as it takes."

There is a possibility that these judges' astounding decisions will be overturned as the cases move forward. In the meantime, the message is clear: don't pump small and dump small. Bigger is better.

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