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April 11, 2005
Global Crossing Ltd., the network services operator, on Monday announced that the Securities and Exchange Commission has concluded an investigation into business practices at the company without assessing a fine or making a finding of fraud.
An SEC order found that Global Crossing did not comply with certain reporting obligations under securities laws, Global Crossing stated in a news release. The Florham Park, N.J., company neither admitted nor denied the findings.
The SEC also ordered three former executives to each pay a $100,000 fine and demanded Global Crossing and the individuals cease and desist from future violations, Bloomberg reported. Bloomberg said the executives are: Joe Perrone, Global Crossing’s former executive vice president of finance; Dan Cohrs, who was CFO; and former CEO Thomas Casey.
The announcement marks the end of a probe that began more than three years ago after Global Crossing filed bankruptcy amid heavy debt, cutthroat competition and a slump in demand for network capacity. Global Crossing emerged from bankruptcy in December 2003.
Were happy to have reached a settlement with the SEC and that we can put these issues solidly behind us without a finding of fraud or a financial penalty against the company, Global Crossing CEO John Legere said.
The SEC has been investigating allegations that Global Crossing and other telecommunications carriers swapped network capacity that they did not need or could not use and violated other accounting rules to meet Wall Streets forecasts.
Last year, Qwest Communications International Inc. agreed to pay a $250 million penalty over government accusations that it fraudulently recognized more than $3.8 billion in revenue and excluded $231 million in expenses between 1999 and 2002. In that settlement, the SEC said it would continue an investigation to determine which individuals were responsible for the illegal activity.
Read more about:Agents
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