In order for Rule 10b-5 to be invoked, there must be intentional fraud or deceit by the party charged with the violation.

Using that benchmark, Mr. Morris would be just within the time limit for bringing suit for intentional fraud.

"There may have been some misunderstanding," he said, "but there was no intentional fraud."

This practice, called rescission, protects insurers from intentional fraud.

But, he said, "I have not seen anything to indicate intentional fraud or tampering."

'An Accounting Problem' The Pentagon official said there had never been any evidence of intentional fraud on the part of the company.

This could result due to a counting error or intentional fraud by the account holder, or the envelope or its contents could have been lost or stolen.

In practice, many of the problems the software catches seem to be employee errors rather than intentional fraud.

Mr. Fields's compromise would also soften a provision that would block shareholder suits over anything except intentional fraud.

The bank characterized the problem as a mistake rather than as intentional fraud.