Jul, 2002 : Nortel Lawsuit Claims Overstated Revenues

📅 July 18, 2002 - A class-action lawsuit filed Wednesday against network hardware developer Nortel Networks accused the company of overstating revenues in late 2000 and early 2001, when the company said it would fail to meet targets for growth.

The lawsuit was filed on behalf of three Ontario residents by Toronto law firms Lerner & Associates and Ronchon Genova, and accuses Nortel and auditor Deloitte & Touche of the kind of fraud that has been destructive to investor confidence in the wake of scandals at Enron, WorldCom and others.
The suit alleges that Nortel engaged in improper accounting practices that overstated its revenues, and that auditors Deloitte & Touche failed to have the company correct its accounting or warn investors.
A spokesperson for Nortel said the lawsuit was without merit, and said that the company would defend itself.
Dozens of class-action lawsuits have been filed against Nortel since the company revealed in February of 2001 that it would fail to meet previously-set targets for growth. Since the announcement, the company's shares have lost billions of dollars in value, the company has posted billions in losses and cut its work force almost in half.

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