Frank A. Dunn is a Canadian business executive who was the chief executive officer of Nortel Networks. In 2007, the U.S. Securities and Exchange Commission filed civil fraud charges against him, and three former senior executives, in a wide-ranging financial fraud scheme. [1]
On January 14, 2013, Dunn was found not guilty of falsifying financial reports in what prosecutors said was a scheme to report profits and gain bonuses. This came four years to the day after Nortel sought bankruptcy protection and began liquidating. [2]
On December 19, 2014, remaining civil charges from the OSC and SEC were simultaneously dropped against Dunn and several of his former colleagues. [3] Ultimately, no civil or criminal charges were successfully brought against Dunn or any others individuals connected to the Nortel accounting scandal.
Dunn joined Nortel Networks (when it was still known as Northern Electric) as a management trainee in 1976, after graduating from McGill University. He was appointed CFO in 1999 under CEO John Roth. After Roth retired, Dunn became the CEO in November 2001 until he was fired for cause, along with several financial executives in April 2004. [4]
On June 19, 2008, Dunn (then aged 54) was arrested by the Royal Canadian Mounted Police, along with two other former Nortel executives, charged with fraud affecting the public market, falsification of books and documents and producing a false prospectus. [5]
Nortel Networks Corporation (Nortel), formerly Northern Telecom Limited, was a Canadian multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa, Ontario, Canada. It was founded in Montreal, Quebec in 1895 as the Northern Electric and Manufacturing Company. Until an antitrust settlement in 1949, Northern Electric was owned mostly by Bell Canada and the Western Electric Company of the Bell System, producing large volumes of telecommunications equipment based on licensed Western Electric designs.
MCI, Inc. was a telecommunications company. For a time, it was the second-largest long-distance telephone company in the United States, after AT&T. WorldCom grew largely by acquiring other telecommunications companies, including MCI Communications in 1998, and filed for bankruptcy in 2002 after an accounting scandal, in which several executives, including CEO Bernard Ebbers, were convicted of a scheme to inflate the company's assets. In January 2006, the company, by then renamed MCI, was acquired by Verizon Communications and was later integrated into Verizon Business.
John Andrew Roth is a Canadian retired business executive. He was the chief executive officer and chairman of Nortel Networks between 1997 and 2001. While he was called "the most successful businessman in modern Canadian history" by Time magazine and named Canada's CEO of the Year by a Bay Street panel in the fall of 2000, by the ignominious end of his career it became clear that his mismanagement destroyed the company.
Peregrine Systems, Inc. was an enterprise software company, founded in 1981, that sold enterprise asset management, change management, and ITIL-based IT service management software. Following an accounting scandal and bankruptcy in 2003, Peregrine was acquired by Hewlett-Packard in 2005. Micro Focus which merged with the HP Software Division in 2017, later marketed the Peregrine products as part of its IT Service Management solutions. Micro Focus was acquired by OpenText in 2023.
Richard Marin Scrushy is an American businessman and convicted felon. He is the founder of HealthSouth Corporation, a global healthcare company based in Birmingham, Alabama. In 2004, following an investigation by the Federal Bureau of Investigation (FBI), Scrushy was criminally charged by the U.S. Securities and Exchange Commission (SEC). Scrushy was charged with 36 of the original 85 counts but was acquitted of all charges on June 28, 2005, after a jury trial in Birmingham.
The Bennett Funding Group was a leasing & funding company based in Syracuse, New York. BFG operated under the Bennett Receivables Corporation, Bennett Receivables Corporation II, Bennett Management and Development Corporation, +++The Processing Center, Inc., Resort Service Company, Inc., American Marine International, Ltd., Aloha Leasing, and Aloha Capital Corporation brands.
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information. The setups are generally made to result in monetary gain for the deceivers, and generally result in unfair monetary losses for the investors. They are generally violating securities laws.
Making false statements is the common name for the United States federal process crime laid out in Section 1001 of Title 18 of the United States Code, which generally prohibits knowingly and willfully making false or fraudulent statements, or concealing information, in "any matter within the jurisdiction" of the federal government of the United States, even by merely denying guilt when asked by a federal agent. A number of notable people have been convicted under the section, including Martha Stewart, Rod Blagojevich, Michael T. Flynn, Rick Gates, Scooter Libby, Bernard Madoff, and Jeffrey Skilling.
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In finance, options backdating is the practice of altering the date a stock option was granted, to a usually earlier date at which the underlying stock price was lower. This is a way of repricing options to make them more valuable when the option "strike price" is fixed to the stock price at the date the option was granted. Cases of backdating employee stock options have drawn public and media attention.
Tomo Razmilovic is a Croatian-born Swedish businessman, formerly the CEO of Long Island, New York-based Symbol Technologies. He is the suspected mastermind of a massive accounting fraud that ultimately cost the company its independence. Currently, the United States Government considers him a fugitive, with the United States Postal Inspection Service offering a $100,000 reward for information leading to his arrest and conviction.
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Frank DiPascali Jr. was an American fraudster and financier who was a key lieutenant of Bernie Madoff for three decades. He referred to himself as the company's "director of options trading" and as "chief financial officer". For a number of years, he played a key part in the daily operation of the Madoff investment scandal, later recounting how he helped manipulate billions of dollars in account statements so clients would believe that they were creating wealth for them.
Accounting scandals are business scandals which arise from intentional manipulation of financial statements with the disclosure of financial misdeeds by trusted executives of corporations or governments. Such misdeeds typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of corporate assets, or underreporting the existence of liabilities; these can be detected either manually, or by the means of deep learning. It involves an employee, account, or corporation itself and is misleading to investors and shareholders.
The Raj Rajaratnam/Galleon Group, Anil Kumar, and Rajat Gupta insider trading cases are parallel and related civil and criminal actions by the U.S. Securities and Exchange Commission and the United States Department of Justice against three friends and business partners: Galleon Group hedge fund founder-owner Raj Rajaratnam and former McKinsey & Company senior executives Anil Kumar and Rajat Gupta. In these proceedings, the men were confronted with insider trading charges: Rajaratnam was convicted, Kumar pleaded guilty and testified as key witness in the criminal trials of Rajaratnam and Gupta, and Gupta was convicted in United States District Court for the Southern District of New York in Manhattan in June 2012.
Timeline of major events for Nortel.
United States v. Elizabeth A. Holmes, et al., was a United States federal criminal fraud case against the founder of now-defunct corporation Theranos, Elizabeth Holmes, and its former president and COO, Ramesh Balwani. The case alleged that Holmes and Balwani perpetrated multi-million dollar wire-fraud schemes against investors and patients. Holmes and Balwani each had their own jury trial.
The Sky Capital Fraud Case was a significant securities fraud prosecution in New York's history involving Ross Mandell, the founder of Sky Capital Holdings Ltd., and Adam Harrington, a former broker at the company. The two men were accused and successfully convicted of defrauding investors out of $140 million over an eight-year period by using high-pressure sales tactics and false promises of high investment returns.