The complaint charged that between October 1999 and December
2000, in an effort to conceal from the investing public that the
company was experiencing serious undisclosed problems in its
optical networking business, Lucent misrepresented the demand for
its optical networking products and engaged in a variety of
improper accounting practices designed to artificially inflate
Lucent's publicly reported financial results.
These practices were said to include booking hundreds of
millions of dollars of revenue from phoney sales.
When the truth about the company's products became known and it
was forced to issue financial restatements, the stock price
plummeted, from a high during the relevant period of $84.19 to just
$12.19. After the class period ended, Lucent's share price
continued to erode, dropping to below $1 per share in late
2000.
The agreement announced yesterday would provide compensation for
a record number of shareholders in a securities suit, and marks the
second largest securities settlement in history.
