The U.S. Securities and Exchange Commission today filed civil fraud charges against four former senior executives of Nortel Networks Corp.

It alleges that they repeatedly engaging in accounting fraud to bridge gaps between Nortel’s true performance, its internal targets and Wall Street expectations. None of these allegations have been proven.

Named in the commission’s complaint are Frank Dunn, Douglas Beatty, Michael Gollogly and MaryAnne Pahapill. The complaint, filed in the U.S. District Court for the Southern District of New York, alleges that these individuals engaged in this misconduct while serving as top corporate executives of Nortel between September 2000 and January 2004. During that time, Dunn served as chief financial officer and chief executive officer; Beatty as controller and CFO; Gollogly as controller; and Pahapill as assistant controller and vice president of corporate reporting.

According to the commission’s complaint, from late 2000 through January 2001, the executives altered Nortel’s revenue recognition policies to accelerate revenue as needed to meet forecasts and, from at least July 2002 through June 2003, they improperly established, maintained and released reserves to meet earnings targets, fabricate profits and pay performance-related bonuses.

“The fraudulent conduct at issue here was egregious and long-running. Each of the defendants betrayed Nortel’s investors and their misconduct gave rise to billions of dollars in shareholder losses,” said Linda Thomsen, Director of the commission’s Division of Enforcement. “The action we take today sends a strong message that officers of U.S.-filing foreign corporations will be held to the same standards of accountability that are required of all participants in the U.S. financial markets.”

The complaint charges the executives with violating and/or aiding and abetting violations of the antifraud, reporting, books and records, internal controls and lying to auditors provisions of the federal securities laws. Dunn and Beatty are separately charged with violations of the officer certification provisions instituted by the Sarbanes-Oxley Act. The commission is seeking a permanent injunction, civil monetary penalties, officer and director bars, and disgorgement with prejudgment interest against all four defendants.

The SEC acknowledged the assistance of the Ontario Securities Commission, which conducted its own separate, parallel investigation. The SEC’s investigation is continuing.