Aug 29, 2002 : SEC Rejects Global Crossing Settlement
📅 - The Securities and Exchange Commission reportedly rejected a settlement offer from Global Crossing this week, saying the company's offer only addressed the company and not specific individuals.
According to reports, under Global Crossing's settlement offer, the company would have agreed to stop fraudulent practices without admitting or denying guilt. The SEC, however, wants any settlement reached to name company executives.
The investigation is centered on swaps, in which Global Crossing purchased capacity from its customers in order to maintain revenue. The SEC reportedly wants to know what the company's founder and chairman Gary Winnick knew about the practices when he sold $123 million in stock during May 2001.
Investigators are attempting to uncover whether the company knew the accounting practice was incorrect while it was making the swaps, or if the company in fact needed the capacity it was purchasing.
Global Crossing was sold, earlier this month, to a pair of Asian conglomerates for $250 million, approximately one percent of its $22 billion bankruptcy-petition valuation.
The company filed for Chapter 11 protection in January, at the time the fourth largest bankruptcy filing ever.
According to reports, under Global Crossing's settlement offer, the company would have agreed to stop fraudulent practices without admitting or denying guilt. The SEC, however, wants any settlement reached to name company executives.
The investigation is centered on swaps, in which Global Crossing purchased capacity from its customers in order to maintain revenue. The SEC reportedly wants to know what the company's founder and chairman Gary Winnick knew about the practices when he sold $123 million in stock during May 2001.
Investigators are attempting to uncover whether the company knew the accounting practice was incorrect while it was making the swaps, or if the company in fact needed the capacity it was purchasing.
Global Crossing was sold, earlier this month, to a pair of Asian conglomerates for $250 million, approximately one percent of its $22 billion bankruptcy-petition valuation.
The company filed for Chapter 11 protection in January, at the time the fourth largest bankruptcy filing ever.
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