Risk & Compliance

Motorola Named in Adelphia Probe

Motorola reports that it has been accused by Adelphia of taking part in the fraud that drove the cable company into bankruptcy.
Stephen TaubAugust 4, 2006

Motorola Inc. said in a regulatory filing that it is involved in an ongoing investigation by the Securities and Exchange Commission regarding Adelphia Communications Corp.

The company added that on June 23, Adelphia objected to Motorola’s claim for payment and asserted “causes of action including preferences, avoidance of liens, fraudulent transfers, equitable subordination and aiding and abetting fraud” as part of the ongoing Adelphia bankruptcy action.

Motorola added in its quarterly filing that Adelphia, which was bought by Time Warner and Comcast on Monday, is alleging damages exceeding $1 billion.

In an E-mail statement in response to questions about the filing, Motorola reportedly told Reuters that it had been “unaware of fraudulent activities being conducted by the principals of Adelphia.”

Motorola also said it reviewed its accounting for the sales to Adelphia and is confident they were recorded in accordance with generally accepted accounting principles, according to Reuters.

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