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Univ. of Toledo College of Law

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Wednesday, April 30, 2008

SEC Settles Earnings Management Charges Against Former Nortel VPs

The SEC announced that Craig A. Johnson, James B. Kinney and Kenneth R.W. Taylor — who were the vice presidents of finance for the Wireline, Wireless, and Enterprise business units of Nortel Networks Corporation (“Nortel”), respectively — agreed to settle the Commission’s charges against them arising from their alleged involvement in Nortel’s earnings management fraud during 2002 and 2003. Each has consented, without admitting or denying the Commission’s allegations against them, to the entry of a final judgment in the Commission’s pending litigation.  The final judgments order each individual to pay a $75,000 civil penalty and to pay disgorgement in the amount of $66,845 (Johnson) and $52,000 (each for Kinney and Taylor), along with prejudgment interest in the amount of $21,186 (Johnson) and $16,481 (each for Kinney and Taylor). The final judgments also bar each individual from acting as an officer or director of any public company for five years and permanently enjoin each individual from federal securities law violations.

http://lawprofessors.typepad.com/securities/2008/04/sec-settles-ear.html

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