The U.S. market regulator has decided not to file civil charges against Global Crossing Ltd.’s founder, Gary Winnick, or fine him $1 million over the firm’s questionable accounting practices, the Wall Street Journal reported on Monday.
Global Crossing, which built an intercontinental network of undersea fiber-optic cable in the 1990s, has been the target of a U.S. Securities and Exchange Commission investigation since 2002. After the Internet boom fizzled, it collapsed in 2002, amid $12.4 billion in debt and questions about its accounting practices.
The newspaper, citing unnamed sources, said SEC Chairman William Donaldson was concerned that Winnick, as nonexecutive chairman of the telecommunications group, had not authorized the inadequate disclosure of certain transactions.
Donaldson and two fellow Republican commissioners overturned a staff recommendation to charge Winnick even though Winnick had tentatively agreed to pay a fine. The decision was made over the objections of two Democratic members, according to the account.
A settlement between the SEC and Winnick had been expected to have been announced last week.
The decision could affect deals the SEC has made with three other former executives of Global Crossing -- including former Chief Accounting Officer Joseph Perrone and former Chief Financial Officer Dan Cohrs -- over the alleged disclosure violations, the Journal said.
The other former executives had wanted Winnick to accept some responsibility, and now the SEC’s lawyers will try to get them to accept the settlements despite Winnick’s situation, according to the paper.
Winnick and the SEC could not be immediately reached for comment.