Skip to main content    

Company Filings

U.S. Securities and Exchange Commission

                        -  About                            -  Careers 
                          -  Commissioners 
                          -  Contact 
                          -  Reports and Publications 
                          -  Securities Laws 
                          -  Mission 
                          -  Commission Votes 
                        -  Divisions & Offices                            -  Corporation Finance 
                          -  Enforcement 
                          -  Investment Management 
                          -  Economic and Risk Analysis 
                          -  Trading and Markets 
                          -  Office of Administrative Law Judges 
                          -  Examinations 
                        -  Enforcement                            -  Litigation Releases 
                          -  Administrative Proceedings 
                          -  Opinions and Adjudicatory Orders 
                          -  Accounting and Auditing 
                          -  Trading Suspensions 
                          -  How Investigations Work 
                          -  Receiverships 
                          -  Information for Harmed Investors 
                        -  Regulation                            -  Rulemaking Activity 
                          -  Proposed Rules 
                          -  Final Rules 
                          -  Interim Final Temporary Rules 
                          -  Other Orders and Notices 
                          -  Self-Regulatory Organizations 
                          -  Staff Interpretations 
                        -  Education                            -  Investor Education 
                          -  Glossaries 
                          -  Small Business Capital Raising 
                        -  Filings                            -  EDGAR – Search & Access 
                          -  EDGAR – Information for Filers 
                          -  Company Filing Search 
                          -  How to Search EDGAR 
                          -  Forms List 
                          -  About EDGAR 
                        -  News                            -  Press Releases 
                          -  Speeches and Statements 
                          -  Securities Topics 
                          -  Upcoming Events 
                          -  Webcasts 
                          -  SEC Videos 
                          -  Media Gallery 

                -  U.S. Securities and Exchange Commission                    -  Divisions & Offices 
                  -  Enforcement 
                  -  Regulation 
                  -  Education 
                  -  Filings 
                  -  Newsroom 
                -  Newsroom                    -  Press Releases 
                  -  Testimony 
                -  RSS Feeds                    -  Press Releases 
                  -  Public Statements 
                  -  Speeches 
                  -  Testimony 

## Enforcement

-  Enforcement 
-  About 
-  Enforcement Manual 
-  Public Alerts 
-  Federal Court Actions 
-  Administrative Proceedings 
-  ALJ Orders 
-  ALJ Decisions 
-  Commission Opinions 
-  Trading Suspensions 
-  Information for Harmed Investors 
-  Enforcement Cooperation Program 
-  Foreign Corrupt Practices Act (FCPA) 
-  Tips & Complaints 
-  Data Delivery Standards 
-  Divisions and Offices 

## Enforcement

-  Enforcement 
-  About 
-  Enforcement Manual 
-  Public Alerts 
-  Federal Court Actions 
-  Administrative Proceedings 
-  ALJ Orders 
-  ALJ Decisions 
-  Commission Opinions 
-  Trading Suspensions 
-  Information for Harmed Investors 
-  Enforcement Cooperation Program 
-  Foreign Corrupt Practices Act (FCPA) 
-  Tips & Complaints 
-  Data Delivery Standards 
-  Divisions and Offices 

# Other

# SEC v. Nortel Networks Corporation, et al., Civil Action No. 07-CV-8851-LAP (S.D.N.Y.) and SEC v. Frank A. Dunn, et al., Civil Action No. 07-CV-2058-LAP (S.D.N.Y.)

                            Oct. 14, 2022                       

On October 15, 2007, the Commission commenced litigation against Nortel Networks Corporation alleging that Nortel engaged in two fraudulent accounting schemes, one involving revenue recognition fraud and the other involving earnings management fraud, which enabled Nortel to meet the unrealistic revenue and earnings guidance that it had provided to Wall Street in 2000 and again in 2002 and 2003. Nortel and Nortel Networks Limited consented to the entry of a Final Judgment against them, which was entered by the United States District Court for the Southern District of New York on October 25, 2007. As required by the Final Judgment, the Company paid to the Clerk of the Court disgorgement of $1 and a civil penalty of $35,000,000, which the Clerk deposited into an interest-bearing account with the CRIS.

The Commission had commenced a related litigation, earlier in 2007, against former Nortel executive officers Frank A. Dunn, Douglas C. Beatty, Michael J. Gollogly, MaryAnne E. Pahapill, Douglas A. Hamilton, Craig A. Johnson, James B. Kinney and Kenneth R. W. Taylor. Johnson, Kinney and Taylor consented to Final Judgments entered by the Court on May 2, 2008, which required each of them to pay a civil penalty of $75,000 plus disgorgement including prejudgment interest in the amount of $88,031, $68,481and $68,481, respectively, to the Clerk of the Court. The funds paid by Johnson, Kinney and Taylor – in the aggregate amount of $449,993 – were deposited by the Clerk of the Court into the CRIS. For more information, you can read Litigation Release Nos. 20036 (Mar. 12, 2007), 20275 (Sept. 12, 2007) and 20333 (Oct. 15, 2007)

0n October 29, 2009, the Commission moved to create a Fair Fund and appoint a Distribution Agent, which the Court approved by Order dated November 2, 2009. The SEC Fair Fund consists of all of the funds paid to date by Nortel Networks Corporation and Nortel Networks Limited (collectively, the “Company”), and three of Nortel’s former executives, Craig A. Johnson, James B. Kinney and Kenneth R. W. Taylor. The funds paid by the Company and the three settling individuals were deposited into the Court Registry Investment System (CRIS) which, with accrued interest, held approximately $35.5 million as of October 2011. On October 5, 2011, the Court approved a Fair Fund Plan of Distribution to Investors.

The SEC Fair Fund is separate and independent from the settlement funds previously established in the private securities class action litigations involving Nortel, which were brought in the United States District Court for the Southern District of New York, the Ontario Superior Court of Justice, the Superior Court of Quebec and the Supreme Court of British Columbia. However, like these class actions, the SEC Fair Fund relates to purchases of Nortel common stock during the Recovery Periods of October 24, 2000 through the close of the markets on February 15, 2001 and/or April 24, 2003 through the close of the markets on April 27, 2004.

If you previously submitted a proof of claim in one of the class actions and that claim was approved, you do not need to submit another Proof of Claim Form to participate in the SEC Fair Fund. If you submitted a proof of claim in one of the class actions that was not approved, or if you wish to submit a claim for additional transactions in Nortel common stock during the relevant period, you must submit a Proof of Claim Form and all required documentation.

On April 2, 2015, the Court entered an order approving the disbursement of the SEC Fair Fund to eligible claimants in accordance with the Plan. See the Court’s Order.

On June 8, 2018, the Court entered an order approving a second disbursement of $31,066.25 from the SEC Fair Fund to eligible claimants in accordance with the Plan. See the Court’s Order.

For more information, please call the Distribution Agent:

Garden City Group, Inc.Telephone Number: (888) 561-9182Email: questions@nortelsecsettlement.comWebsite: www.nortelsecsettlement.com

SOCIAL MEDIA1Twitter 2Facebook2Instagram3RSS4YouTube6LinkedIn8Email Updates

## About The SEC

-  Budget & Performance 
-  Careers 
-  Commission Votes 
-  Contact 
-  Contracts 
-  Data Resources 

## Transparency

-  Accessibility & Disability 
-  FOIA 
-  Inspector General 
-  No FEAR Act & EEO Data 
-  Ombuds 
-  Whistleblower Protection 

## Websites

-  Investor.gov 
-  Related Sites 
-  USA.gov 

## Site Information

-  Plain Writing 
-  Privacy & Security 
-  Site Map 

**Return to Top