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A capacity swap is what got Qwest and global crossing in trouble with the SEC a few years ago. It basically goes like this: Qwest sells $100,000 in capacity to global crossing In return, global crossing sells $100,000 in capacity to qwest The purchases cancel each other out so no real transaction has taken place Both companies record $100,000 in revenue Clearly these are not really revenues, but it was the result of myopic behavior by the company's CEO's attempting to meet their quotas and in the long run it landed them in hot water

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13y ago

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