Accounting & Tax

Nortel Faces Formal SEC Probe

The telecom equipment company's problems are growing worse by the week.
Stephen TaubApril 6, 2004

Nortel Networks Corp. announced that the Securities and Exchange Commission has launched a formal probe of the company’s two recent restatements.

Three weeks ago Nortel put its chief financial officer, Douglas Beatty, and its controller, Michael Gollogly, on paid leaves of absence. The suspensions are part of an investigation into the circumstances leading up to the company’s restatement announced in October. Nortel added last month that it would “likely need” to restate its financials again.

Nortel also acknowledged that the SEC had been conducting an informal inquiry until now and that an independent review by its audit committee is also under way.

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“Nortel Networks has been fully cooperating with the SEC and will continue to do so in order to bring the inquiry to a conclusion as promptly as possible,” it added in a statement.