June 8, 2007
SEC Will Impose Hefty Penalty on Nortel for Financial Fraud
The Wall St. Journal reports that the SEC will fine Nortel $100 million for accounting fraud violations. Nortel restated its financial results in 2005 and admitted that it overstated its revenues by $3.4 billion. If this report is true (WSJ attributes it to an inside source at Nortel), it should dispel the notion that the SEC's new policy requiring enforcement staff to seek approval before beginning settlement negotiations that could include a corporate penalty would result in lower amounts. See WSJ, SEC Plans to Fine Nortel Up to $100 Million for Fraud.
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