Telco networking company Lucent Technologies has
reached a settlement with the Securities and Exchange Commission regarding a
probe over how it booked revenues as troubles in the telecom industry were surfacing.
The Murray Hill, N.J.-based company said it reached an agreement in
principle with the staff of the SEC and admitted no wrongdoing as a result
of the deal.
The probe dates back to November and December of 2000, when Lucent said
it identified “certain revenue recognition issues that it publicly disclosed
and brought to the SEC’s attention.”
As a result of that announcement, Lucent said it removed about $679 million in revenue on its books.
The investigation was centered on a practice known in the industry as
“channel stuffing,” which entails sending products to resellers for
inventory and counting as sales whether or not the networking gear actually
sold.
Without admitting or denying any wrongdoing, Lucent said the deal
includes a consent decree enjoining the company from future violations of
the
anti-fraud, reporting, books and records and internal control provisions of
the federal securities laws.
No fines or penalties are included in the settlement, Lucent said, and it does not have to restate any prior public filings. The SEC is expected to sign off on the deal.
In a statement, Patricia Russo, chairman and CEO of Lucent Technologies, said: “We are very pleased to be able to put this issue behind us in this manner and totally focus on moving our business forward.”
Shares of Lucent were up by about 6 percent on the news to $1.61.
