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Looks like



legal worries might not be behind it after all.

The troubled New Jersey telecom-gear giant said late Friday that U.S. authorities are investigating the company's operations in Saudi Arabia. The disclosure comes a week after a Saudi telecom firm sued Lucent, alleging it bribed top officials in the Middle Eastern country to secure a lucrative contract.

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Lucent said it is cooperating with the Justice Department and

Securities and Exchange Commission

inquiries, which cover possible violations of the Foreign Corrupt Practices Act. On Friday, Lucent shares slipped 2 cents to $1.84.

The probes started this month after a lawsuit was filed against Lucent in U.S. District Court for the Southern District of New York. The suit, filed by National Group for Communications & Computers, accused Lucent of paying $15 million in bribes to Ali Al-Johani, a former minister of Saudi Arabia's Ministry of Post Telephone and Telegraph. Lucent said last week it believed the claims were baseless.

Earlier this year Lucent shares staged a modest rally, into the mid-$2 range, as the company began to clear its plate of the many legal challenges that arose during a long slide from glory. In just the first quarter of 2003, Lucent settled a whistleblower lawsuit, reached terms over a separate SEC investigation and agreed to pay as much as $420 million to close out a massive shareholder lawsuit. Those actions helped to resolve the business and accounting missteps of a management team that departed unceremoniously nearly three years ago.

Still, the company has yet to arrest the erosion of its core telecom-equipment business. Lucent recently posted a weaker-than-expected third quarter, a shortfall that once again pushed back its timeline for returning to profitability. Lucent's stream of quarterly red ink now reaches back some three years, a period during which the stock has lost more than 90% of its value.