[JURIST] The US Securities and Exchange Commission (SEC) [official website] filed fraud charges [press release] Monday against former executives of Canadian telecommunications manufacturer Nortel Networks [corporate website; JURIST news archive], accusing the corporation of misleading investors. The complaint [PDF], brought in the US District Court for the Southern District of New York [official website], accuses Frank A. Dunn, Douglas C. Beatty, Michael J. Gollogly and MaryAnne E. Pahapill of violating federal securities laws and lying to auditors. The alleged misconduct occurred under the executives' control from September 2000 to January 2004 as an attempt to meet financial forecasts by altering the corporation's revenue recognition policies. Dunn and Beatty also face charges under the Sarbanes-Oxley Act [PDF] for violating officer certification provisions. The SEC is seeking a permanent injunction to keep the defendants from serving as directors, as well civil monetary penalties.

The Ontario Securities Commission (OSC) [official website] on Monday also announced a May 1 hearing [press release] for Dunn, Beatty, and Gollogly on a number of possible sanctions [PDF] against them. The OSC and SEC investigations of Nortel are being conducted separately, although each organization has acknowledged the parallel investigation. Dunn said Monday that he welcomes the OSC hearing and that he believes it will remedy negative public opinion about the commitment and honesty of Nortel employees. No criminal charges have yet been filed in Canada, but a spokeswoman for the Royal Canadian Mounted Police [official website] confirmed that an investigation is still pending. The Globe and Mail has more.