Nortel’s ex-CEO, Frank Dunn, and two other former Nortel execs were charged in Canada with seven fraud-related counts for misstating the networking company's financial results in 2002 and 2003. Dunn, ex-CFO Douglas Beatty, and former controller Michael Gollogly, were fired by the company in 2004. The trio last year was the targets of an SEC civil fraud suit.
Nortel has seen more damage from this imbroglio than from the slowing economy. It’s currently paying some $2.5 billion to more than 88,280 shareholders who sued the company for damages from the fraud. It also paid out $35 million in October as a result of the SEC suit and paid an additional $1 million to the Ontario Securities Commission.
Along the way, Nortel was regularly in the spotlight as U.S. and Canadian regulators charged Mr. Dunn and later other former financial executives with civil fraud.
And, these charges may not be the end of it. Results of a U.S. grand jury probe in Dallas, which began before the Canadian’s own investigation, may result in additional criminal charges.
How’d you like to be the PR guy trying to spin this story?
For more:
- See this Wall Street Journal story
Or this Ottawa Citizen story
Related articles:
Nortel swings to a loss Nortel report
SEC hounds ex-Nortel execs SEC report