09/06/06

The U.S. Securities and Exchange Commission warned Lucent to expect an
"enforcement action" over violations of the Foreign Corrupt Practices
Act by executives at its Chinese operations.

In April 2004, Lucent fired the president, COO, a marketing executive
and a finance manager at its Chinese operations following a company
investigation into the use of bribery by Lucent executives to secure
contracts. The firing of the four executives was the result of FCPA
violations uncovered by Lucent, and was reported to the SEC and the
U.S. Department of Justice.
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On Tuesday, Lucent reported in an SEC filing that it had received a
Wells notice from the SEC related to violations of the FCPA by Lucent
China. A Wells notice is used to inform a company that SEC staff has
made a preliminary recommendation to take action against it.

The FCPA violations uncovered by Lucent in 2004 did not have a material
impact on the company's business. However, Lucent is not able to
determine whether the ongoing investigation into those violations will
have an impact on the company's operations in China or elsewhere, the
filing said.



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