Nortel Networks's new chief financial officer resigned abruptly last night.
Mr Terry Hungle's resignation came over questions about personal investments he made in a company retirement plan just ahead of corporate announcements that caused significant swings in the company's stock price.
Mr Hungle, who was named chief financial officer of Nortel late last year, allegedly transferred about $78,500 from a stock fund invested primarily in Nortel shares to a fixed-income fund last March prior to the company's announcement that it would cut 5,000 jobs and would not meet reduced profit forecasts, Nortel said in a statement released after the close of markets yesterday.
Nortel's stock fell 16 per cent on March 28th, 2001, the first trading session after the announcement.
Mr Hungle then transferred $86,300 from the fixed-income fund to the stock fund in December, when Nortel said it would lose less than expected during the fourth quarter, the company said.
The shares rose 13 per cent between December 20th and December 24th, the next trading day after the announcement.
Nortel said the transfers were made outside the trading windows the company imposed on certain employees, including Mr Hungle, and were made prior new releases on potential market-moving information.
Nortel said it has voluntarily notified the US Securities and Exchange Commission and the Ontario Securities Commission about the personal investment transactions.
AP