Thursday, September 27, 2012

Nortel trial ends soon ...

UPDATE : October 10, 2012

"The case of three former high-ranking Nortel executives accused of fraud is now in the hands of an Ontario judge.

Ontario Superior Justice Frank Marrocco reserved his decision today after hearing four days of closing arguments and months of testimony in the long-running trial.

Marrocco is scheduled to deliver his decision January 14.

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Frank Dunn The trial is near over for ex-chief K9 Frank Dunn and his compliant partner doggies from Nortel. Where do we stand on this here one?

Guilty as charged says this innocent bystander, and what can we say, we were actually holding some call options on Nortel at the time by accident and profited like, err, a bandit.

http://www.thestar.com/business/article/1263420--nortel-fraud-trial-closing-arguments-begin
"He called “improper use of excess accounting accruals” widespread and habitual at Nortel, a telecom equipment maker that declared bankruptcy in 2009 after the collapse of the dotcom bubble.

“It’s a fraud on the public, that’s the essence of the case against the accused,” he said.

Hubbard argued that the company manipulated provisions on its books in late 2002 and early 2003 to meet earnings targets that were otherwise unattainable.


The trial against the ex-Nortel executive continues and the salacious facts are coming out fast and furious now.

"Ms. Verity testified she was annoyed that there were changes to accounting entries into late January, which she said was “very late” in the closing process. The final changes were made just two days before the company issued a press release announcing its 2002 results.

http://www.theglobeandmail.com/report-on-business/nortel-changed-accounts-two-days-before-reporting-results/article2360645/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Home&utm_content=2360645


The last two changes saw Nortel suddenly reverse $25.5-million from a reserve for obsolete inventory that had just been created two weeks earlier. The Crown alleges the amount was reversed arbitrarily because the company discovered it had to book an unrelated $25.5-million cost for a business deal involving JDS Uniphase Corp. (JDU-T13.010.141.09%) and the executives wanted the bottom line to come out to the same amount.

In court Tuesday, Ms. Verity was shown journal entries she completed recording a $25,519,848 cost for the JDS deal, and a second entry recording a $25,519,848 reduction in the inventory reserve.

Crown attorney David Friesen noted the amounts matched exactly, and asked Ms. Verity whether there was any connection between the inventory reserve and the JDS deal. She said she was not aware of any."

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"Three former Nortel Networks Corp. (NRTLQ) executives are in criminal court accused of a $5 million fraud at what was once North America’s largest telephone-equipment maker.


http://www.bloomberg.com/news/2012-01-16/former-nortel-executives-face-4-9-million-fraud-charges-in-canadian-court.html
Big bets in the day and not that long ago were all about the juggernaut we knew as Nortel Networks Corp. Too big to fail absolutely not with these boyz in charge. Familiar names to some of us and innocent until proven guilty is how it works. Hardly this observer is supposing with the conclusion appearing grim for the terrible threesome if convicted.

"Former Chief Executive Officer Frank Dunn, former Chief Financial Officer Douglas Beatty and former Controller Michael Gollogly allegedly misstated financial results between 2000 and 2004, allowing them to pocket millions in bonuses. All three pleaded not guilty as the trial began today at Ontario Superior Court in Toronto."
M.Gollogly Frank Dunn D.Beatty
Nortel filed for bankruptcy in January 2009 after reporting $11.6 billion in consolidated assets against $11.8 billion in debt as of Sept. 30, 2008.

"The company has since sold its business units for at least $7.5 billion, including the $4.5 billion sale in July of its patent portfolio."