(Associated Press via NewsEdge)US regulators filed civil fraud charges against four former Nortel Networks executives, including ex-CEO Frank Dunn, alleging they repeatedly altered the telecom equipment maker's revenue to meet Wall Street expectations.
The US Securities and Exchange Commission action came on the same day as a complaint filed by the Ontario Securities Commission. Regulators from both countries have been probing the Canadian company's accounting for years.
Since 2005, Nortel has been attempting to recover from an accounting crisis that affected results and caused shareholder lawsuits, regulatory investigations and the firing of key financial executives, including CEO Dunn, who was also a former CFO.
'The fraudulent conduct at issue here was egregious and long-running. Each of the defendants betrayed Nortel's investors and their misconduct gave rise to billions of dollars in shareholder losses,' Linda Thomsen, director of the SEC's Division of Enforcement, said in a news release.
Also named were former CFO Douglas Beatty, controller Michael Gollogly and assistant controller MaryAnne Pahapill. The company fired the four in April 2004, alleging misconduct and negligence.
The SEC said the four, while serving as executives from September 2000 to January 2004, were involved in repeatedly altering Nortel's revenue recognition to bridge gaps between the company's true performance, its internal targets and market expectations.
The US SEC is seeking a permanent injunction, civil monetary penalties, officer and director bars and repayment, plus interest.
Dunn issued a statement saying he welcomed the OSC hearing and chance to clear his name.
Beatty's attorney said he would have no comment and Gollogly's lawyer did not return calls to his office. Pahapill's office said she was out of town and unavailable for comment.
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