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Securities and Exchange Commission

recently blocked a request for information about



on the grounds that its release could interfere with an investigation, raising a potential red flag about the software maker, according to a private research firm.

In a note to clients Monday, SEC Insight, based in Plymouth, Minn., said the SEC blocked its Dec. 15 request for PeopleSoft records on grounds that the records' release would "reasonably be expected to interfere with enforcement activities."

SEC Insight acknowledged it had no additional information about those enforcement activities, and PeopleSoft vehemently denied any investigation is under way. "We have not been contacted by the SEC enforcement

division and we have no reason to believe we are under any investigation by them," PeopleSoft spokesman Steve Swasey said Monday.

In its note, SEC Insight acknowledged a handful of explanations for the SEC's refusal to release documents about PeopleSoft, which rejected the latest $9.4 billion hostile bid from rival


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on Monday. Among them:

An ongoing case against former PeopleSoft auditor Ernst & Young, first announced in May 2002. The accounting firm is fighting SEC sanctions related to auditor-independence violations involving its business relationship with PeopleSoft. The case is currently awaiting an administrative law judge decision.

A separate investigation into PeopleSoft's controversial defense tactics against Oracle's bid, which the company sweetened last week to $26 a share. Those tactics include PeopleSoft's money-back guarantee offer to its customers, a liability worth a whopping $1.55 billion.

The two investigations cited above could be moving forward simultaneously.

However, the carefully crafted SEC Insight note also acknowledged that the so-called law enforcement exemption cited by the SEC "could mean very little."

"We don't mean to be non-committal on this, but the implications of this data point are sufficiently serious that it is essential that we be as fair as we can" be, the note said.

"We obviously have no interest in either side of the story," added SEC Insight President John Gavin. "Clients pay us to present the facts as we find them."

However, Gavin noted that PeopleSoft vigorously denied any problem with the SEC three months before regulators went public with their charges against Ernst & Young. The SEC has not charged PeopleSoft in the matter.

In the interest of full disclosure, SEC Insight also noted that a request for information on Oracle had received a similar rejection from the SEC about a year ago. At that time, SEC Insight said a review of SEC litigation releases found that several people had claimed affiliations with Oracle that did not exist. The firm also cited Oracle's controversial contract with the state of California dating back to 2001.

An Oracle spokesperson could not be immediately reached for comment.

Shares of Oracle shed 14 cents, or 1%, to close Monday at $13.28, while PeopleSoft lost 53 cents, or 2.3%, to close at $22.22. Shares of each company were virtually unchanged in after-hours trading.