Nortel subpeona in financial criminal probe
More bad news for Nortel Networks - already facing probes by U.S. and Canadian regulators, the Brampton, Ontario-based supplier of broadband and telecommunications gear today acknowledged it has received a U.S. federal grand jury subpeona for documents related to an ongoing federal criminal investigation.
The subpeona, issued as part of the investigation by the U.S. Attorney General's office for the Northern Texas division in Dallas, requires the company to produce financial statements and corporate, personnel and accounting records from Jan. 1, 2000 to present.
Nortel says it will fully cooperate with the investigation.
Nortel was already facing probes by the U.S. Securities and Exchange Commission and the Ontario Securities Commission into its financial reporting practices dating back to 2000. The company in October had issued a restatement of earnings back to that period, but in March it announced it would have to make a second restatement. That unusual step was apparently enough to draw the attention of U.S. and Canadian regulators.
Last month, the Canadian gear maker fired three top executives, including its CEO, amid the widening probe into its earnings reporting. The company's board of directors handed CEO Frank Dunn his walking papers and named board director William Owens the new CEO. It also formally dismissed former CFO Douglas Beatty and former Controller Michael Gollogly, permanently replacing them with William Kerr and MaryAnne Pahapill, respectively.