In the 5½ years since he left Nortel Networks Corp., former chief executive officer John Roth says he has never received a call from investigators at the Securities and Exchange Commission or the Ontario Securities Commission as they probed the telecom equipment maker's accounting.
After a multiyear probe, both stock market regulators laid out allegations yesterday against former senior financial officials from Nortel, and the SEC said that at least a year's worth of the alleged book-cooking took place while Mr. Roth was still in the top job.
The investigation encompassed reviews of documents and interviews of individuals, SEC officials said. No charges were laid against Mr. Roth, and the retired executive said in an interview yesterday that nobody from either of the regulators ever got in touch with him.
"Well, I guess there's no connection then," Mr. Roth said, when asked about his take on the lack of contact from regulators looking into Nortel's bookkeeping.
The SEC and the OSC both declined to comment on whether they had been in touch with Mr. Roth, or on the possible reasons for not talking to the former CEO.
The SEC's civil complaint against Frank Dunn, who was promoted from chief financial officer to replace Mr. Roth as CEO in November, 2001, and three other financial officers who worked at Nortel alleges that the company began to fudge revenue by misusing so-called "bill and hold" transactions starting "no later than September, 2000."
Mr. Roth's statement that he never got a call or a knock on the door from investigators may signal that investigators have found no connection between him and the alleged misdeeds, said Ross Albert, a former federal prosecutor with the U.S. Department of Justice and enforcement attorney with the SEC.
"[It]would tend to indicate that those agencies did not have sufficient evidence to tie him to the alleged fraud at Nortel," said Mr. Albert, now a partner at the Atlanta law firm of Morris Manning & Martin.
Christopher Conte, an associate director in the enforcement division at the SEC who worked on the Nortel case, said the investigation, which continues, has been thorough.
"We spent a lot of time looking at our record and figuring out what investigative steps needed to be taken," he said.
"We all endeavour to conduct thorough and complete investigations based on our review in-house of what the record shows and what is appropriate for us to do in terms of evaluating conduct," he added.
Mr. Dunn, who was fired from Nortel in 2004, said in a statement that he welcomed a hearing before the OSC and is "looking forward to the opportunity that this open and transparent process will give for the truth to finally come out about the events of 2000 and 2003."
Since his own departure from Nortel, Mr. Roth has been living in Caledon, Ont. -- a hilly, treed area northwest of Toronto that is known for grand homes and country estates -- and indulging his passion for collecting cars.
His time hasn't all been spent at ease. He has battled cancer, though he doesn't want to talk about what type. The prognosis looks promising, he said.
"You have to wait five years to see if you really are clear, but so far it's looking reasonable."
At 65, Mr. Roth said he has no aspirations to return to the business world.
"Oh, no -- been there, done that," he said, adding that "I think one year at Nortel is worth three years anywhere else."
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