Nortel CFO quits after questionable transactions

Nortel Networks' chief financial officer (CFO), Terry Hungle, has resigned after just a few months in his position, following...

Nortel Networks' chief financial officer (CFO), Terry Hungle, has resigned after just a few months in his position, following suggestions he has been involved in improper transactions.

The company said it had voluntarily notified the US Securities and Exchange Commission and the Ontario Securities Commission of the circumstances surrounding some personal investment transactions by Hungle in 2001. They were made shortly before Nortel issued news releases on 27 March and 21 December and "occurred outside the trading windows imposed by the Corporation upon certain employees," according to a Nortel statement.

Nortel announced Hungle's promotion to CFO last October. Previously, he had been president of finance for Nortel Networks Americas. Frank Dunn, Nortel's president and chief executive officer, has been appointed acting CFO. He will work with the company's board of directors to choose a new CFO.

In March, while working as vice-president, finance and business development - Americas, Hungle transferred about $78,500 (£55,030) in the Nortel 401(k) plan from a stock fund investing mostly in Nortel stock to a fixed-income fund, according to Nortel. In December, he transferred about $86,300 (£60,497) from the fixed-income fund to the stock fund, Nortel said.

On 27 March 2001 Nortel announced that it expected its results for the first quarter of 2001 to fall below earlier expectations. On 21 December it provided an outlook for its results in the fourth quarter of 2001.

Hungle's transactions were personal in nature and did not relate to Nortel's business, operations or financial position, the statement said.

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