NEW YORK-The Securities and Exchange Commission is conducting a formal investigation of Lucent Technologies Inc. for possible fraudulent accounting practices, The Wall Street Journal reported.
The SEC reportedly is looking into whether Lucent improperly booked $679 million in revenues during its 2000 fiscal year, which ended Sept. 30. The Journal said Lucent erased in December the $679 million in revenues following an internal investigation, and announced it was taking a restructuring charge of as much as $1.6 billion.
The main accounting blunder allegedly occurred when the company took back $452 million in revenues after it discovered equipment it had sold to distributors was never passed on to customers.
Citing a “person with knowledge of related SEC documents,” the Journal said commission staff is investigating Lucent’s procedures for booking sales, in particular its use of “nonrecurring credits,” or one-time discounts, given to customers, as well as Lucent’s accounting treatment of software-licensing agreements.
Kathleen Fitzgerald, spokeswoman for Lucent, told the Journal that Lucent was voluntarily cooperating with the SEC.
Lucent spokesman Bill Price told CBS.Marketwatch.com that Lucent “voluntarily brought it to the public.”
“We expected the SEC to look into it,” Price said.
PricewaterhouseCoopers L.L.P., Lucent’s independent auditor, would not comment on the investigation.
Shares of Lucent dropped upon news of the possible investigation. Shares were trading at $15.09 at RCR Wireless News press time, down $1.80 from the previous day’s close.
