MURRAY HILL, New Jersey, United States-Lucent Technologies Inc. has announced an agreement in principle with Securities and Exchange Commission (SEC) staff to close an investigation begun two years ago, after Lucent discovered and notified the SEC about US$679 million of revenue it had recognized improperly.
Lucent will not have to pay fines or penalties or make any financial restatements under terms of the settlement, which requires final SEC approval. The deal also bars the telecom equipment maker from any future violations of federal securities laws related to fraud, internal controls, and reporting and maintenance of books and records.
This news comes against the background of Standard and Poor’s decision to remove the company from its credit watch list.
Since the investigation began more than two years ago, Lucent has gone through drastic reorganization and endured the dramatic effects of recent market conditions, including cutting its work force in half, spinning off divisions, overhauling top management and seeing a persistent drop in stock value.
