SEC Probing Nortel4/05/2004 8:48 AM Eastern
The Securities and Exchange Commission has launched a formal probe of financial restatements at Nortel Networks Corp., Reuters reported Monday.
The telecommunications-equipment maker said Monday that the SEC issued a formal order of investigation in connection with last year's results restatement and a warning in March that a second restatement would be needed, according to Reuters.
The restatements had already been the subject of an informal SEC inquiry.
According to Reuters, Nortel's accounting troubles started in October, when it warned that it would restate financial data going back to 2000 because the company took larger-than-needed accruals and provisions when it cut about two-thirds of its staff and operations.
"It would be irresponsible to speculate on the SEC activities," Nortel spokeswoman Tina Warren told Reuters. "The company has been in communications with the SEC since October 2003, and it has been cooperating with them fully."