Lucent Faces Corruption Charge
In a SEC filing made late Wednesday, Lucent said it was expecting a "Wells" notice relating to an investigation of its Chinese operations under the Foreign Corrupt Practices Act (FCPA).
A "Wells" notice, noted Lucent, is "a common procedure where the SEC staff has preliminarily decided to recommend an enforcement action to the Commission."
Lucent now has the right to respond to the "Wells" notice and engage in discussions with the SEC regarding its intended actions.
The investigation relates to an incident first reported by Lucent back in April 2004, when the vendor reported the findings of an internal audit and an external investigation to the U.S. Department of Justice and the SEC regarding "incidents and internal control deficiencies in Lucent's operations in China that potentially involved FCPA violations." At the time, Lucent fired several executives in China related to the investigation. (See Lucent Purges China Leaders)
The FCPA is a set of federal laws aimed at preventing corrupt business practices by U.S. multinationals operating in foreign countries.
Lucent says it is cooperating with the authorities but believes "these incidents and deficiencies did not have a material effect on its results of operations. However, Lucent cannot determine whether this continuing investigation will affect its future business operations in China or elsewhere."
Watch this space!
— Ray Le Maistre, International News Editor, Light Reading