PeopleSoft Says Not Aware of Any SEC Probe

"We have not been notified by the SEC or anyone else about an investigation by the SEC," PeopleSoft spokesman Steve Swasey says.

An SEC spokesman, citing a long-standing policy, declined to say anything about whether the agency had launched a probe into PeopleSoft.

The company was responding to a report issued Thursday by SEC Insight, a Plymouth, Minn.-based private research firm, which said PeopleSoft "may be involved in a potentially undisclosed SEC inquiry/investigation involving the SEC's Division of Enforcement."

In its two-page research report, SEC Insight also wrote: "We do not know for sure that PeopleSoft is involved in an SEC investigation/inquiry--all we know is that our most recent request for information on PeopleSoft was partially denied."

The SEC denied access to the requested records under the law enforcement exemption, the report says.

The SEC law enforcement exemption protects from disclosure records or information compiled for law enforcement purposes, the release of which would reasonably be expected to interfere with enforcement proceedings.

SEC Insight uses legal means to get copies of SEC documents that do not appear on EDGAR or other filing systems. The document request written about in the company's Feb. 28 report was its first on PeopleSoft.

"There are many legitimate reasons for the SEC to deny access to information... However, in our experience it is not often that we see the law enforcement exemption cited," the report says. "Frequently, this type of denial is based upon the existence of an SEC investigation. Again, we don't know for sure."

PeopleSoft in January said it was exercising an option to buy Momentum Business Applications for $90 million in cash. The company had been criticized in recent months because it created Momentum and spun it out in 1998 in a move that enabled the software vendor to use a permitted accounting strategy to boost earnings by shifting to Momentum some of its research and development costs.

Shares of Pleasanton, Calif.-based PeopleSoft, which fell nearly 9 percent, on Thursday, rebounded $3.53 on Friday to end the regular Nasdaq session at $32.60. Options turnover in PeopleSoft also had cooled considerably from its heightened pace Thursday. By mid-afternoon Friday, 2,987 calls and 3,551 puts changed hands combined across the five U.S. options exchanges, according to Track Data, a provider of real-time market data for equities and options. Thursday, 25,063 options traded, of which 8,060 calls and 17,003 were puts, up from its average daily volume of about 6,555 options, according to McMillan Analysis.

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