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Ex-Nortel CEO in hot water

Former Nortel executives including ex-CEO Frank Dunn were charged this week with fraud.

Former Nortel executives including ex-CEO Frank Dunn were charged this week with fraud.

The US Securities and Exchange Commission (SEC) filed civil fraud charges against four former staff of the Canadian telecom equipment maker after it alleged they manipulated earnings to meet targets.

In addition to Dunn, former chief financial officer Douglas Beatty, former controller Michael Gollogly and former assistant controller MaryAnne Pahapill were named in the case.

Dunn, Beatty and Gollogly were fired from Nortel in April 2004, while Pahapill left the company in 2005.

“Each of the defendants betrayed Nortel’s investors and their misconduct gave rise to billions of dollars in shareholder losses,” the SEC enforcement chief Linda Thomsen said in a statement.

The executives are also the subject of an investigation by the Ontario Securities Commission in Canada, which could lead to fines of up to US$860,000.

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