Accounting & Tax

Nortel Probe Turns Criminal

Federal grand jury in Texas subpoenas documents going as far back as 2000.
Stephen TaubMay 17, 2004

Nortel Networks Corp. announced that it received a federal grand jury subpoena as part of a criminal investigation by the U.S. Attorney’s Office for the Northern District of Texas.

The Toronto-based company employs 4,700 workers at its U.S. headquarters in Richardson, Texas, near Dallas, according to The New York Times.

The subpoena seeks certain documents, including financial statements and corporate, personnel, and accounting records going back to January 1, 2000.

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Last month Nortel fired its chief executive officer and two top finance executives and said it plans to restate 2003 earnings downward by 50 percent. Nortel spokeswoman Tina Warren told Reuters she could not comment on whether the investigation is directed at the three executives or at other individuals. She added, however that “this relates to the same period of time we’ve already been talking about.”

Earlier last week, William Owens, who replaced president and CEO Frank Dunn during the late April purge, said he would resign from the board of directors of Symantec Corp., effective immediately. The prior week, Owens resigned his board position at Metal Storm Limited, a defense technology company based in Brisbane, Australia. Metal Storm’s board and Owens, however, agreed that he would continue to advise the company.