The Securities and Exchange Commission has filed settlements for its claims against two former Lucent Technologies executives accused of playing a role in the telecommunications companys accounting fraud.
The SEC filed settlements Monday for its claims against Alice Leslie Dorn, Lucents former vice president of indirect sales for North America, and Jay William Carter, the former president of Lucents AT&T customer business unit. Lucent was spun off from AT&T in 1996 and merged 10 years later with Alcatel to form Alcatel-Lucent.
The SEC alleged that Dorn entered into side agreements with some of Lucents distributors, granting them rights and privileges beyond those contained in their regular distribution agreements. Those side agreements made it improper for Lucent to recognize revenue, and caused Lucent to materially overstate its pre-tax income for fiscal year 2000.
Without admitting or denying the SECs allegation, Dorn has consented to the entry of an order permanently enjoining her from aiding and abetting the violation of the anti-fraud provisions, and the books and records, internal controls, and reporting provisions, of federal securities laws. She will also pay a civil penalty of $40,000.
The SEC alleged that Carter authorized a side agreement in connection with a $53 million sales transaction with AT&T Wireless Services in 1999-2000, which made it improper for Lucent to recognize revenue in the third quarter of 2000. Without admitting or denying the SECs allegations, Carter has consented to the entry of an order permanently enjoining him from violating the books and records and internal control provisions of the federal securities laws. He will also pay a $25,000 civil penalty.
The settlements are subject to court approval.
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