TORONTO – The trial of three former Nortel executives accused of fraud while at the fallen telecom equipment maker continues, with prosecutors expected to wrap up their opening statements in what promises to be a lengthy case
Former CEO Frank Dunn, 57, was charged in 2008 – just as the company imploded – with fraud affecting the public securities markets, as well as with falsification of accounts and documents and involvement in issuing a false prospectus.
Global News takes a look back at the rise and fall of the telecom giant.
May 1, 2000: Nortel, which was born in 1882 as Bell’s in-house mechanical department, becomes a completely independent company after Bell Canada Enterprise distributes 94 per cent of its stake to shareholders.
July 26, 2000: Nortel shares peak at $124.50.
November 1, 2000: Frank Dunn is promoted to CEO of Nortel.
February 15, 2001: Against the backdrop of a weak U.S. economy, Nortel cuts earnings forecasts in half for 2001, after projecting 30-per-cent growth. The announcement causes stock values to drop 33 per cent.
October 18, 2001: Nortel posts a third-quarter loss of $3.5 billion.
February 11, 2002: Terry Hungle resigns as Chief Financial Officer of Nortel after it was revealed that he bought and sold company stock within his retirement plan. Dunn steps in to temporarily take on duties of CFO.
May 29, 2002: Nortel announces it will cut 3,500 jobs and sell assets such as its optical components section. Stocks continue to slide.
October 23, 2003: Nortel reports a quarterly profit, but says it will restate earnings from 2000 until the first half of 2003.
March 15, 2004: Company says it will restate earnings again and will be late filing its annual report.
April 5, 2004: The U.S. Securities and Exchange Commission announces it will launch an investigation into the accounting at Nortel.
April 28, 2004: Nortel fires CEO Frank Dunn and names company director Bill Owens president and CEO.
August 16, 2004: The RCMP announces it will launch a formal investigation into Nortel’s accounting.
September 30, 2004: Nortel cuts 10 per cent of its staff, or 3,250 jobs.
January 11, 2005: Nortel finally completes its financial restatements, and announces that 12 executives will pay back bonuses totalling $8.6 million.
March 14, 2005: Nortel names Bill Owens as vice-chairman, while also leaving him in the position of CEO.
October 17, 2005: Nortel appoints Motorola executive Mike Zafirovski as president and CEO.
February 8, 2006: Nortel announces it will pay out $2.47 billion to settle two class-action lawsuits relating to the accounting scandal.
March 10, 2006: The company again delays filing its annual report, and announces it will restate earnings for 2003, 2004 and part of 2005.
February 7, 2007: Nortel cuts 3,900 jobs and relocates 1,000 others to China and India.
March 12, 2007: The SEC lays charges against four former employees of Nortel, including former CEO Dunn.
October 15, 2007: Nortel pays $35 million to settle a civil lawsuit filed by the SEC.
February 27, 2008: Nortel announces it will slash 2,100 jobs and move 1,000 others as part of continued restructuring plans.
June 19, 2008: Dunn, ex-CFO Douglas Beatty and former corporate Controller Michael Gollogly are arrested on fraud charges for their roles in the accounting scandal.
January 14, 2009: Nortel files for Chapter 11 bankruptcy protection in the U.S., and CCAA in Canada, one day before it is to make a $107-million interest payment. Its credit rating slides from CCC to D.
February 25, 2009: Company cuts 3,200 jobs worldwide.
June 23, 2009: Nortel stocks are delisted from the Toronto Stock Exchange, where they bottomed out at 18.5 cents per share.
July 17, 2009: The U.S. Federal Pension Benefit Guaranty Corp. says is will ensure the benefits of 23,000 of Nortel’s American workers by covering a $514-million shortfall.
October 7, 2009: Former Nortel employees gather at Queen’s Park in Toronto to pressure the Ontario and Canadian governments to ensure pension benefits of Canadian employees.
October 26, 2009: The Quebec government says it will work to protect the pension benefits of the 3,750 Nortel employees in the province.
November 26, 2009: Documents emerge showing that Nortel managers approved a plan in late 2009 to give raises to top managers.
November 27, 2009: Nortel Networks Corp.’s union and former employees failed to persuade an Ontario appeals court they are entitled to retirement and severance payments.
December 16, 2009: Former Nortel Networks chief executive John Roth is seeking up to $1 billion insurance coverage from his former employer as protection from
lawsuits.
July 1, 2011: Nortel reaches a deal to sell the last of its assets.
January 16, 2012: The criminal trial against Dunn, Beatty and Gollogly begins in Toronto.
January 17, 2012: Crown lawyers at the fraud trial of three former Nortel Networks executives say the men created a culture of dishonesty at the fallen telecom equipment maker, encouraging staff members to use misleading accounting practices to help disguise quarterly losses as profits.
January 18, 2012: Crown lawyers in the fraud trial of former Nortel Networks executives say some letters between the fallen telecom equipment maker’s top brass show they knew what they were doing was wrong.
– With a file from Postmedia News
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