Former Nortel Execs Charged With Accounting Fraud

By Reuters  |  Posted 06-19-2008 Print Email

Meanwhile, Dunn's lawyer said in a statement that "we are confident that the evidence will demonstrate that Mr. Dunn acted honestly and diligently in the interests of Nortel's shareholders and employees at all times, and that he will be acquitted of these charges."

In October 2007, Nortel paid $35 million to settle civil charges filed by the U.S. Securities and Exchange Commission related to the fraud. The regulator had alleged Nortel's schemes let it meet "unrealistic" revenue and earnings forecasts it had provided to Wall Street.

The SEC had also charged Dunn and Beatty with directing parts of the fraud.

The accounting scandal that hit Toronto-based Nortel earlier this decade was one of the major hurdles it faced in its turnaround efforts after the tech bubble burst in 2001, and was a big part of the firm's fall from grace as a stock market darling.

It also forced the company to restate its results a number of times, shaking investors' faith in its prospects and triggering a bevy of investigations.

The police said they received co-operation from the U.S. Federal Bureau of Investigation, U.S. and Ontario securities regulators, and Nortel itself.

The investigation has been a lengthy one: the RCMP became involved in the case as early as May 2004 and confirmed a criminal probe three months later. In February of this year, a media report emerged that the charges against the former executives were imminent.

The RCMP had faced criticism that its investigation was dragging on for years without any charges being laid. In a statement on Thursday, it acknowledged such probes are lengthy and complex.

Nortel shares were off 38 Canadian cents at C$9.62 in Toronto and 26 cents at $9.50 in New York.

Back to homepage 


Submit a Comment

Loading Comments...