Milberg Weiss Extends Class Period in Class Action Suit Filed on Behalf of Purchasers of Nortel Networks Corp. Securities

Business Wire, Feb 21, 2001

Business Editors & Legal Writers

NEW YORK--(BUSINESS WIRE)--Feb. 21, 2001

The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on February 21, 2001, on behalf of purchasers of the securities of Nortel Networks Corp. ("Nortel" or the "Company") (NYSE:NT; TSE:NT) between November 1, 2000 and February 15, 2001, inclusive (the "Class Period"). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: http://www.milberg.com/nortel/

The action, numbered 01-CV-1033, is pending in the United States District Court for the Eastern District of New York, located at 225 Cadman Plaza East, Brooklyn NY, 11201, against defendants Nortel, John Andrew Roth (CEO, President and Director), William F. Conner (President of Nortel's E-Business Solutions), Chahram Bolouri (President of Nortel's Global Operations) and Frank Dunn (Chief Financial Officer).

The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between November 1, 2000 and February 15, 2001 concerning the demand for its products. Specifically, the complaint alleges that defendants issued several press releases in which they provided revenue and earnings guidance to Wall Street and the investing public for the first quarter and full year 2001. Defendants knew at the time they made these statements that, in fact, Nortel was experiencing a substantial shortfall in first quarter sales and earnings due to decreased orders from its customers.

Specifically, in one of its press releases, dated January 18, 2001, defendants represented that Nortel's "global reach and industry leading portfolio" would allow it to "continue to outpace the market and gain profitable market share" even in the face of the "tightening of capital within the telecom sector." The announcement sent its stock price soaring 10% in one day. The complaint alleges that the statement was materially false and misleading when made because the Company had no basis for reassuring the market that demand for its products would remain robust, given the economic slowdown that was impacting companies in general and the telecommunications sector -- upon which Nortel relies -- in particular.

On February 15, 2001, less than a month after issuing its latest market moving representations, Nortel issued a press release announcing that it was drastically lowering its guidance for Nortel's 2001 fiscal year because of decreased demand for its products due, in large part, to spending cuts by telecommunications companies. Following the announcement, Nortel's stock price plunged by 34% in one day, from $29.75 per share to $19.50 per share (erasing $33 billion of Nortel's market capitalization). Prior to the disclosure of the true state of its business, individual defendants Bolouri and Conner collectively sold over $7 million of their personally held Nortel stock. Additionally, during the Class Period, Nortel used $2.5 billion of its artificially inflated stock price to complete its purchase of JDS Uniphase's Zurich, Switzerland-based subsidiary and related assets in Poughkeepsie, New York.

If you bought the securities of Nortel between November 1, 2000 and February 15, 2001 you may, no later than April 17, 2001, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action.

Milberg Weiss Bershad Hynes & Lerach LLP (http://www.milberg.com) is a 170-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, and Boca Raton and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others, and has been responsible for more than $30 billion in aggregate recoveries. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:

Steven G. Schulman or Samuel H. Rudman One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165

Phone number: (800) 320-5081 Email: Nortelcase@milbergNY.com Website: http://www.milberg.com