The SEC stated: "Nortel Networks Corporation (“Nortel” or “the Company”) engaged in two fraudulent accounting schemes, one involving revenue fraud and the other involving earnings management fraud, which enabled Nortel to meet the unrealistic revenue and earnings guidance that it had provided to Wall Street in 2000 and again in 2002 and 2003."

The SEC stated that: "[It] filed civil fraud charges in the U.S. District Court for the Southern District of New York against Nortel Networks Corporation and its principal operating subsidiary Nortel Networks Limited (Nortel) alleging that Nortel engaged in accounting fraud from 2000 through 2003 to close gaps between its true performance, its internal targets and Wall Street expectations."

The SEC stated that: "[It] filed fraud charges against Nortel Networks Corporation and its principal operating subsidiary Nortel Networks Limited (Nortel) alleging that Nortel engaged in accounting fraud from 2000 through 2003 to close gaps between its true performance, its internal targets and Wall Street expectations."

On October 25, 2007, the Court issued a final judgment as to Defendants Nortel Networks Corporation and Nortel Networks Limited stating: "Defendants . . . consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction), waived findings of fact and conclusions of law, and waived any right to appeal from this Final Judgment."