SEC probes Lucent over turnover figures

Networking vendor Lucent is being investigated by the US Securities and Exchange Commission over what the company is describing as "revenue recognition" problems.

Networking vendor Lucent is being investigated by the US Securities and Exchange Commission (SEC) over what the company is describing as "revenue recognition" problems.

According to the Wall Street Journal, the investigation is focusing on whether Lucent improperly booked $679m in turnover. The telecoms giant conducted its own investigation into the figure last year, and said it had accounted for the amount and had notified the SEC as to what action it was taking.

The SEC is believed to be looking into the possibility of the company carrying out 'channel stuffing', when turnover on sales made to distribution partners is recognised before being sold on to end users.

A Lucent representative said: "As we announced in November, we wanted to make this information public as soon as we discovered the issue. We fully expected that after initiating contact with the SEC, it would look into this matter thoroughly, and this is what it is doing."

The company said that it had volunteered the information to the SEC and has shared information "fully and freely" since the investigation began.