Wohlgemerkt nicht 80.000$ Gewinn, sondern Handelsvolumen der Insiderverkäufe.
Direkt vor der Gewinnwarnung einen Fond, der NT-Aktien hielt verkauft und einen anderen dafür gekauft.
Vollidiot...
By TSC Staff
02/11/2002 05:44 PM EST
Nortel's (NT:NYSE - news - commentary - research - analysis) chief financial
officer, Terry Hungle, resigned Monday after the company told regulators that
he had traded mutual funds holding the company's stock during investment
blackout periods.
The Toronto-based networking equipment maker said Hungle, whom it named
financial chief late last year, would be supplanted as acting CFO by CEO Frank
Dunn. Nortel said it would search for a new financial chief and emphasized that
Hungle's trades had no impact on its business or operations.
The departure comes as the fallout from the Enron scandal continues to
reverberate through the market. Accounting rumors have increasingly moved
stocks in recent weeks, prompting executives at a number of companies to go
out of their way to say their accounting and disclosure practices are
appropriate. The notion that executives and directors often receive preferential
treatment when it comes to their stock holdings has become particularly widely
held in the wake of the Enron fiasco.
After rising 55 cents to $6.84 during regular trading Monday, Nortel shares
were halted after hours.
Getting Personal?
Nortel said after the close of trading Monday that it "voluntarily" told the
Securities and Exchange Commission and the Ontario Securities
Commission of "the circumstances surrounding certain personal investment
transactions carried out in 2001 by Hungle in the Nortel Networks U.S.
Long-Term Investment (401k) Plan." The transactions "occurred outside the
trading windows imposed by the Corporation upon certain employees, including
Hungle, and prior to news releases issued by the Corporation on March 27,
2001 and Dec. 21, 2001," Nortel said.
The company issued earnings preannouncements those days. The March 27
release forecast an earnings shortfall; before that release hit the wires, Nortel
said, Hungle transferred $78,500 (U.S.) from a fund investing primarily in
Nortel stock into a bond fund. That release, issued after the market closed
March 27, sparked a 16% selloff in Nortel's stock March 28.
The Dec. 21 release generally painted a rosier picture and said Nortel and its
banks had agreed to restructure a credit line, easing Wall Street's liquidity
worries. Before that release was made public, Hungle transferred $86,300 from
the bond fund into a Nortel stock fund, Nortel said. That release, issued the
morning of Dec. 21, pushed Nortel's shares up 11%.
Stunning
Allegations of Hungle's trading activity stunned one corporate watchdog,
Patrick McGurn, director of corporate programs for Institutional Shareholder
Services, a firm that advises large investors on corporate governance and proxy
issues.
"It's beyond belief," says McGurn, saying that he couldn't think of any other
incident in which the chief financial officer of an S&P 500 company was said to
have traded shares during the no-trading window.
If indeed the allegations about Hungle's trades are true, says McGurn, the
burning question is, "How did such an idiot get to be a CFO of a major telecom
company?"
What's especially bizarre, says McGurn, is why Hungle would take such a risk
for $80,000 trades. "You're not talking a huge return here," he says.
