Wednesday, September 12, 2007

SEC Charges Four More Ex-Nortel Execs

The U.S. Securities and Exchange Commission (SEC) charged four more former officers of Nortel Networks with engaging in accounting fraud by manipulating reserves to manage Nortel's earnings.

The defendants, Douglas A. Hamilton, Craig A. Johnson, James B. Kinney and Kenneth R.W. Taylor, were the former vice presidents of finance for Nortel's Optical, Wireline, Wireless and Enterprise business units, respectively.

The SEC's original complaint, among other things, charged three former corporate officers of Nortel -- CEO Frank Dunn, CFO Douglas Beatty and Controller Michael Gollogly -- with directing the earnings management fraud.

Among other allegations, the amended complaint alleges that Hamilton, Johnson, Kinney and Taylor engaged in the following misconduct:

The amended complaint charges Hamilton, Johnson, Kinney and Taylor with violating and/or aiding and abetting violations of the antifraud, reporting, books and records and internal controls provisions of the federal securities laws. The Commission seeks a permanent injunction, a civil monetary penalty, an officer and director bar, and disgorgement with prejudgment interest against each of these defendants.

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