TORONTO—Current and former directors, officers and employees of Nortel Networks Ltd. are forbidden by the Ontario Securities Commission to trade shares of the company’s stock, Nortel said in a statement.
Nortel said the temporary cease trade order came as a result of its delay in filing its 2005 annual reports and corresponding Canadian filings, which the company announced March 10. The company has restated its financials three times within three years.
Nortel also said that according to OSC procedures, the temporary order is expected to be replaced by a permanent order within 15 days and will remain in place until two full business days after the OSC receives all the filings Nortel is required to make under Ontario securities laws. The company said it expects commissions in other provinces to issue similar orders with respect to residents in those jurisdictions.
The order is another setback for Nortel as the equipment vendor struggles to settle lawsuits, firm up its accounting standards and reorganize its product lines to better suit the market. In February, Nortel agreed to pay $2.4 billion to settle shareholder lawsuits stemming from its accounting scandals, and Mike Zafirovski, the company’s new chief executive officer, has been making sweeping management changes while streamlining the company’s product offerings in an effort to make Nortel competitive in a handful of not-yet-announced technologies.
Nortel is also the focus of merger-mania in light of Alcatel Inc.’s proposed merger with Lucent Technologies Inc. Nortel is seen as an appealing merger partner for European or perhaps even Chinese equipment vendors looking to establish or increase market share in North America.
