WASHINGTON ? The attorney for Gary Winnick, the founder and former chairman of Global Crossing Ltd., said yesterday he has been told that his client will not be charged or fined by the Securities and Exchange Commission after a lengthy investigation of the fibre-optic company?s finances.

The SEC?s two-year probe of Global Crossing has focused particularly on its swaps of fibre-optic network capacity with other telecom companies.

Enforcement attorneys at the agency recently recommended a fine against Winnick as part of a settlement with the SEC. But the SEC commissioners voted 3-2, on party lines, on Thursday to reject the staff attorneys? recommendation, a person familiar with the matter said Monday. The person, who spoke on condition of anonymity, confirmed a report in yesterday?s editions of The Wall Street Journal. SEC Chairman William Donaldson is said to have sided with his fellow Republican commissioners Paul Atkins and Cynthia Glassman in opposing the sanction at a closed-door meeting.

?We are gratified that after a thorough and complete investigation with which we fully cooperated, the SEC has determined that no charges should be brought against Gary Winnick,? his attorney, Gary Naftalis, said in a statement. ?We always believed that the evidence demonstrated that Gary Winnick acted lawfully and properly in connection with Global Crossing.?

SEC spokesmen declined comment.

Winnick headed the fibre-optic giant, which epitomised the boom and bust of the telecom industry and collapsed into the fourth-largest corporate bankruptcy in US history in January 2002. The company emerged from bankruptcy a year ago with new top executives, a work force cut in half and long-term debt slashed. Its majority shareholder now is Singapore Technologies Telemedia Pte.

Such a rejection by the SEC of the enforcement staff?s recommendation is unusual but not rare. In several enforcement cases in the recent past, Donaldson has voted with the two Democratic commissioners, Roel Campos and Harvey Goldschmid, in favor of stiffer penalties ? and their three votes have prevailed as a majority.

In this case, however, Donaldson made the argument that Winnick was chairman, but not chief executive, of the company and did not sign off on the disclosures the company made to the SEC regarding its swaps of fibre-optic network capacity with other telecom companies, the person familiar with the situation said.

The agency previously alleged that Qwest Communications International Inc., one of the companies that engaged in the swap transactions with Global Crossing, used them to artificially boost revenue by hundreds of millions of dollars.

The SEC lawyers also are seeking to take action against other former Global Crossing executives, including former chief accounting officer Joseph Perrone and ex-chief financial officer Dan Cohrs, The Journal reported. Their attorneys did not return telephone calls from The Associated Press seeking comment.

In March, Winnick and other former company executives agreed to pay a combined $325 million to settle a class-action lawsuit by shareholders. They did not admit wrongdoing in the settlement.

Winnick, who sold $123 million worth of Global Crossing stock as the company careened toward bankruptcy, agreed to pay $55 million.

He had tentatively agreed to pay a $1 million civil fine in settlement negotiations with the SEC attorneys, according to The Journal.

Winnick, who was a heavy campaign donor to both Democrats and Republicans, came under fire in congressional hearings in 2002 for selling his stock before the company?s fortunes plummeted.

@EDITRULE:On the Net:

Securities and Exchange Commission: http://www.sec.gov

Global Crossing Ltd.: http://www.globalcrossing.com