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Compliance December 2, 2002
Nortel Workers Files Enron-like Stock Suit
February 12, 2002 (PLANSPONSOR.com) - With shades of
the allegations made against beleaguered energy trader Enron,
employees are suing Nortel Networks Corp., claiming they were
improperly forced to buy company stock in their retirement
plan.
Reported by Fred Schneyer
According to a Dow Jones report, that suit charged that Nortel executives made “material misrepresentations and omissions” to get them to buy and keep company stock in the Nortel Networks Long-Term Investment Plan.
As was the case with Enron, employees charged that Nortel’s company stock pressure was coming at time when the stock’s value was dropping and was being made even though executives were selling shares themselves, Dow Jones said. The suit was filed in US District Court for the Middle District of Tennessee.
The lawsuit covers the period between March 7, 2000, when the stock closed at a split-adjusted $61.22 a share, and December 21, 2001, when the stock closed at $7.13 a share. The stock recently traded at $6.31.