Lucent Accepts Conclusions Of SEC Report

by Glen Shapiro, LawAndTax-News.com, New York

03 March 2003

Lucent Technologies has agreed with the conclusions of an SEC accounting practices investigation that refer to the company's disclosure of accounting irregularities in November and December 2000. Subject to final approval from SEC regulators, Lucent will avoid fines and regulatory action.

Under the agreement Lucent is not required either to restate its results or to admit to any misdemeanours, but has consented in a statement "to a prohibition against future violations of the anti-fraud, reporting, books and records, and internal control provisions of the Federal securities laws."

SEC investigations of Lucent began after the company reported accounting violations to regulators in late 2000. At issue were the initial booking of $679 million in sales and a later adjustment of fiscal 2000 revenue to exclude that amount after customers returned some unused equipment.

The SEC's two-year long investigation is thought to have reviewed the company's accounts over the past ten years, questioned former executives and board members including former US Treasury Secretary, Paul O'Neill, about their knowledge of possible accounting problems, questioned whether the company had provided misleading revenue forecasts in 1999 and 2000 and examined the uses to which a restructuring charge of $2.6bn in 1995 were put

Former Chairman Henry Schacht, and former finance chief Deborah Hopkins did not respond to requests for comment following the announcement of the agreement with the SEC.

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