Capital Markets

Nortel in Default of Financial Reporting Rules

In addition, four executives placed on paid leave last month have been identified as divisional finance chiefs.
Stephen TaubMay 10, 2004

The Ontario Securities Commission has found Nortel Networks Corp. to be in default of financial reporting rules because it filed documents that contain “a significant deficiency,” according to Reuters.

Nortel, which announced late last month that it plans to restate 2003 earnings downward by 50 percent, is also reviewing its restatements for 2000, 2001, and 2002, and the first and second quarters of 2003.

The finding by the commission, Canada’s equivalent of the U.S. Securities and Exchange Commission, requires Nortel to issue updates about its situation approximately every two weeks, noted Reuters. The wire service added that the Ontario commission will probably issue a trading ban on Nortel directors, officers, and insiders.

In addition, The Wall Street Journal has identified four Nortel executives who were placed on paid leave last month amid the company’s latest restatement warning. Citing people familiar with the situation, the Journal named the executives as four divisional finance chiefs: James Kinney at the wireless networks unit, Ken Taylor with enterprise networks, Craig Johnson at wireline networks, and Doug Hamilton with the optical networks group.

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