Feeds

Nortel CFO quits over pension claims

Forewarned is forearmed

  • alert
  • submit to reddit

The essential guide to IT transformation

ComputerWire: IT Industry Intelligence

Nortel Networks Corp has announced the immediate resignation of its CFO Terry Hungle and notified US and Canadian regulators, alleging he has broken the rules of the company's stock investment plan,

Terry Murphy writes

.

Nortel said Hungle, a 20-year veteran of the firm who was appointed CFO in early October, moved money in his 401k investment plan in and out of Nortel stock outside of "trading windows" imposed on certain high-level employees by the company.

The company said that in March 2001 then-finance-VP Hungle transferred about $78,500 of 401k money out of Nortel stock into a fixed income fund, before the company's March 27 public profit warning. He also transferred about $86,300 back into Nortel stock in December 2001 before the company's December 21 guidance upgrade, the company said.

"This matter is unfortunate, but the actions we have taken are in the best interests of Nortel Networks," said CEO Frank Dunn. "Let me emphasize this matter solely relates to the personal investment transactions made by Terry Hungle, and does not relate to the business, operations or financials of Nortel Networks."

On March 27, the company said its first fiscal quarter net loss could be as great as $0.12, compared to previous expectations of $0.04 per share. Its shares fell 16.5% immediately following the news. On December 21, the company reduced its net loss guidance by $0.02 to $0.16 per share, giving its share price a 12% boost the next day. On both occasions Hungle would have had foreknowledge of the earnings updates.

The resignation comes as perhaps an early example of a technology company getting its house in order to minimize exposure to the current post-Enron paranoia surrounding public companies' accounting practice. While Nortel insists that Hungle's alleged activities do not reflect on its own financial performance, investors are jittery at the slightest sign of irregularities.

Nortel, listed in New York and Toronto, said it has voluntarily notified the US Securities and Exchange Commission and the Ontario Securities Commission. While the company searches for a successor, CEO Dunn will act as CFO. Nortel said it "will have no further comment on this pending regulatory matter."

© ComputerWire.com. All rights reserved. ®

5 things you didn’t know about cloud backup

More from The Register

next story
Microsoft exits climate denier lobby group
ALEC will have to do without Redmond, it seems
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
BYOD's dark side: Data protection
An endpoint data protection solution that adds value to the user and the organization so it can protect itself from data loss as well as leverage corporate data.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?