DEFINITION of 'Global Crossing'
A communication services company that filed for bankruptcy protection amid an accounting scandal where it had allegedly inflated earnings by using capacity swaps, among other things. Capacity swaps are the exchange of telecommunications capacity between carriers that is booked as revenue without money ever being exchanged.
BREAKING DOWN 'Global Crossing'
This scandal happened around the same time as the Enron transgression. In early 2002, the Global Crossing bankruptcy was the fourth largest in U.S. history. In 2005, it settled with the SEC, having been determined that it did not comply with numerous accounting laws and is to refrain from violating any other accounting laws.