Global Crossing

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Reorganization

    A process designed to revive a financially troubled or bankrupt ...
  2. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  3. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
  4. Enron

    A U.S. energy-trading and utilities company that housed one of ...
  5. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...
  6. Inherent Risk

    The risk posed by an error or omission in a financial statement ...
Related Articles
  1. Top 8 Ways Companies Cook The Books
    Personal Finance

    Top 8 Ways Companies Cook The Books

  2. The Biggest Stock Scams Of All Time
    Investing

    The Biggest Stock Scams Of All Time

  3. Are Your Stocks Doomed?
    Markets

    Are Your Stocks Doomed?

  4. Business Owners: Avoid Enron-esque Retirement ...
    Options & Futures

    Business Owners: Avoid Enron-esque Retirement ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center