Faruqi & Faruqi, LLP Announces Commencement of Class Action Lawsuit Against Nortel Networks Corp.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 23, 2001

The following announcement was issued by the law firm of Faruqi & Faruqi, LLP.

Notice is hereby given that on February 22, 2001 a class action lawsuit was commenced in the United States District Court for the Eastern District of New York on behalf of all purchasers of Nortel Networks Corp. (NYSE: NT) ("Nortel" or the "Company") common stock between November 1, 2000, and February 15, 2001, inclusive (the "Class Period").

The Complaint charges Nortel and certain of its executive officers with violations of the federal securities laws, including Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Among other things, plaintiff claims that defendants issued a series of materially false and misleading statements in press releases and SEC filings concerning Nortel's revenues and business prospects. Specifically, the complaint alleges that on January 18, 2001 defendants issued a press release to the investing public announcing record operating results for the year 2000, and especially strong fourth quarter 2000 performance. Besides boasting that Nortel's "industry leading portfolio" would allow it to "continue to outpace the market and gain profitable market share" despite the tightening of capital within the telecom sector, defendant Dunn projected that Nortel would achieve 30% growth in revenues and EPS in 2001. The complaint alleges that defendant's guidance concerning revenue and earnings for the full year 2001 was materially false and misleading because at the time they made these statements, defendants were aware that the economy in the United States had slowed down dramatically. As a result, defendants' misrepresentations caused the price of Nortel's securities to be inflated throughout the Class Period, allowing certain defendants to collectively sell over $7 million of personally held Nortel stock.

On February 15, 2001, Nortel shocked the market when it announced that it was drastically reducing guidance for the 2001 fiscal year because of decreased demand for its products due, in large part, to spending cuts by telecommunications companies. Instead of the previously announced growth rate of 30%, Nortel now projected growth rates of 15% and 10% for 2001 revenues and EPS respectively. As a result of this disclosure, the Company's common stock plummeted approximately 34% from its closing price of $29.75 per share on February 15, 2001 to as low as $19.50 on February 16, 2001, erasing more than $33 billion in market capitalization in the process.

If you purchased Nortel common stock during the Class Period, you may, not later than April 17, 2001, move the court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action, or have any questions concerning this notice or your rights or interests, please contact:

ANTHONY VOZZOLO, ESQ. FARUQI & FARUQI, LLP 320 East 39th Street New York, NY 10016 Telephone: [phone] or [phone] Fax: [phone] e-mail ([e-mail])