Lucent Revenue Recognition problems in 2000?

Question

1.- Can somebody help me with information of the revenue recognition problems of Lucent?
2.- Did Lucent exhibit any early warning signs?
3.- What risks were faced by Lucents competitors?

Answer 1

Didn't seem to be much of a problem.

"The storm clouds over telecommunications gear maker Lucent Technologies are clearing up, bringing a sunnier forecast."

An agreement with federal regulators ended a two-year probe with no penalties. Murray Hill-based Lucent said Thursday it has reached an agreement with the Securities and Exchange Commission resolving an investigation that began late in 2000, when Lucent disclosed it had prematurely booked $679 million in revenues in the prior quarter. Lucent notified the SEC, fired one employee and restated earnings figures already publicly reported.

No details were disclosed, but it seems that contract revenue were all reported in the period the contracts were signed instead of spreading revenue over the period covered by the contracts.