Nortel to pay $1M to Canadian regulators

TORONTO, May 22 (UPI) -- Nortel Networks Corp. agreed to pay $1 million to settle the Ontario Securities Commission's probe of its accounting-fraud charges, the regulator said Tuesday.

The payment the Toronto telecommunications equipment agreed to make will go toward the cost of the investigation by Canada's main regulator, but will not include any penalties, the commission said.

Penalties in addition to the fees Nortel paid for outside investigations, restating financial results and settling class-action lawsuits would not deter similar cases. Nortel, which has cooperated with investigators, also was penalized for the conduct of former executives, the OSC said.

Nortel must continue addressing financial-reporting issues, reporting to the commission on a quarterly basis, the commission said.

The agreement came three years after the OSC accused Nortel of issuing misleading or untrue financial statements to appear to meet earnings forecasts.

After the company issued restatements in 2003 and 2004, it fired CEO Frank Dunn, Chief Financial Officer Douglas Beatty and Controller Michael Gollogly. Nortel later issued two more restatements.

"We are pleased this is a fair and balanced resolution to the matter that is in the best interests of the shareholders," Chief Executive Officer Mike Zafirovski said.