Is Nortel Networks eager to move beyond years of financial scandal? The company moved quickly to settle a lawsuit with the Securities and Exchange Commission for $35 million yesterday, on the same day the SEC filed the lawsuit. The charges stem from allegations the company resorted to accounting fraud between 2000 and 2003 to cover up its inability to meet earnings expectations. Several former Nortel executives still face civil fraud cases filed by the SEC.
Lingering fraud allegations and ongoing executive departures had made it hard for Nortel to out-run the shadows of the last few years, but CEO Mike Zafirovski has steered Nortel into unified communications and onto an M&A track. The company also has taken the lead with interesting new innovations like provider backbone transport.
The M&A strategy, though well-publicized, has yet to result in any significant deals. Nortel has been hounded by the observations that it's a mid-tier vendor (though a large one) in a world of increasingly larger global vendors. But, in recent weeks, the mega-vendors have hit the skids. Without any major M&A integration challenges to deal with and corporate scandal fading, perhaps Nortel is finally in a good spot.
- See this story in Telephony
- The SEC filed civil cases against former Nortel execs last month