“The Securities and Exchange Commission accused Lucent Technologies and nine former and current employees yesterday of fraudulently reporting nearly $1.2 billion in revenue,” writes Ken Belson in today’s New York Times.

“The agency also accused a former executive of WinStar Communications of engaging in a fraud scheme in which Lucent recorded $125 million in software sales to WinStar.”

“The accusations, made in a civil lawsuit filed in Federal District Court in New Jersey, come after a three-year government inquiry into Lucent’s inflation of its sales figures dating back to the 2000 fiscal year.”

“Lucent, the nation’s largest maker of telecommunications equipment, and three of the nine employees have agreed to settle with the government without admitting or denying wrongdoing. Lucent will not have to make any additional adjustments to its earnings statements, but it will pay a $25 million fine for not cooperating with the investigation, the largest penalty ever levied against a corporation for failure to cooperate.”

“The accusation against Lucent comes after smaller fines were levied against the Bank of America and Xerox and is emblematic of the S.E.C.’s growing frustration with evasive and obstructive behavior by companies under investigation.”

” ‘Stiff sanctions and exposure of their conduct will serve as a reminder to companies that only genuine cooperation serves the best interest of investors’ Paul Berger, the S.E.C.’s associate director of enforcement, said in a statement.”

“Shares of Lucent declined 18 cents, or 5.5 percent, to close at $3.10 yesterday. The announcements helped drag the Nasdaq composite index down 1.45 percent to 1,876.”

“Yesterday’s move against Lucent added another jolt to the embattled telecommunications industry, whose fortunes have plummeted since the technology bubble burst several years ago. Industry analysts said some of Lucent’s accounting problems stemmed from pressure to show stable sales and close deals even as the boom in spending on telecommunications equipment collapsed.”

“Companies are still paying the price for their aggressive accounting. Last month, the S.E.C. opened formal investigations of accounting irregularities against Lucent’s biggest rival, Nortel Networks. The company, which is based near Toronto, has since fired several top executives and cut the 2003 profits it originally reported in half.”