The SEC filed a complaint and final judgment in Federal District Court against Lucent Technologies, which will pay a $25 million civil penalty, but will not be required to make any financial restatements. The SEC also charged nine current and former Lucent officers, executives and employees, and one former Winstar Communications Inc. officer with securities fraud and aiding and abetting Lucent’s violations of the federal securities laws. The SEC’s complaint alleges that Lucent fraudulently and improperly recognized approximately $1.148 billion of revenue and $470 million in pre-tax income during its fiscal year 2000.
Lucent and three former employees agreed to the settlement without admitting or denying any wrongdoing.
The SEC complaint alleges that the defendants Nina Aversano, Jay Carter, Leslie Dorn, William Plunkett, John Bratten, Deborah Harris, Charles Elliott, Vanessa Petrini, and Michelle Hayes-Bullock, in their respective capacities as officers (Aversano and Carter), executives (Plunkett, Bratten, Dorn and Harris) and employees (Petrini, Elliott and Hayes-Bullock) of Lucent improperly granted, and/or failed to disclose, various side agreements, credits and other incentives to induce Lucent’s customers to purchase the company’s products. These extra-contractual commitments were made in at least ten transactions in fiscal 2000, and Lucent violated GAAP by recognizing revenue on these transactions both in circumstances: (a) where it could not be recognized under GAAP; and (b) by recording the revenue earlier than was permitted under GAAP. http://www.sec.gov
