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O'Neill Unaware of Lucent Probe

November 02, 2002|From Reuters

Treasury Secretary Paul H. O'Neill is unaware of any probe by federal regulators into accounting at Lucent Technologies Inc. when he was on the audit committee of the telecom equipment maker, a spokeswoman for O'Neill said Friday.

"Corporate misdeeds revealed during the last year led the secretary to be very vocal in calling for increased corporate disclosure and greater accountability for CEOs," the spokeswoman, Michele Davis, said. "The secretary is not aware of any SEC inquiry into the audit committee, but he is confident that the audit committee acted appropriately during his tenure."

She declined to comment further.

Lucent reported revenue recognition problems in November 2000 and revised its fiscal 2000 fourth-quarter sales by $679 million a month later, and the Securities and Exchange Commission launched an investigation.

Lucent now faces a broader SEC probe covering possible earnings manipulations dating as far back as the mid-1990s, the Wall Street Journal reported Friday. Regulators also are looking at whether current or former Lucent board members, including O'Neill, may have been aware of accounting violations at the company, the paper said, citing people familiar with the probe.

O'Neill joined Lucent's board in October 1996 and resigned in December 2000 to join the Cabinet of incoming President George W. Bush.

Also Friday, Moody's Investors Service cut its ratings on Lucent, affecting about $7 billion of debt, to low "junk" status, saying the company is quickly using up cash as sales fall.

Lucent's shares fell 9 cents to $1.14 on the New York Stock Exchange.

Lucent officials said they had no knowledge of a widening of the federal probe and said the investigation was old news.

The SEC repeatedly has declined to discuss the probe and did so again Friday.

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