Ethics - Bernard Ebbers Conviction

Wrongful convictions are a disturbing threat to the criminal justice system. Concerned authorities must get to the causes behind and this trend, and put adequate measures in place to ensure the trend is reversed. The legal process must be beyond reproach, and police officres, prosecutors, counsel, and the jury must work in hearmony to ensure efficient and effective discharge of justice. The amount of money lost because of these convictions is

As with Enron, the more that it was investigated the worse it became. There was fraudulent reporting on the balance sheet and income statement some that was found after the fact during the post-bankruptcy audit ( (Romar & Calkins, 2006). The total of the fraudulently report amounts was approximately $73.7 billion in overstated revenues and $5.8 billion in overstated assets for a total of $79.5 billion in overstatements in less than a two year period (Romar & Calkins, 2006). The biggest difference with WorldCom is that it restructured and was bought by

Because the telecom industry was doing well in the 90's, Ebbers became very rich as the value of WorldCom's stock climbed. However in the early 2000s the industry took a swing for the worst, earnings rejected, and WorldCom's stock began to fall. Ebbers quickly became "upside down" on his stock holdings and owed millions to the banks he borrowed money from. In a desperate attempt to prevent himself from going bankrupt, Ebbers and other company executives began fraudulently altering WorldCom's financial statements. Many people were hurt by the WorldCom fraud. Lots of honest, hard working line level WorldCom employees lost their jobs while losing the value of the stock in their WorldCom retirement savings accounts at the same time. Other investors who depended on WorldCom's false financial statements also lost what they invested. Nobody really benefited from the scandal, however it did give the executives a couple more years of glory and power before everything went

Many of us are familiar with historical films such as “The Shawshank Redemption”, but the reality is that wrongful convictions have occurred throughout history and although less frequently, still occur today. A wrongful conviction can greatly impact an individual’s life and may continue to be an issue even after exoneration. Many people are under the impression that individuals who are wrongfully convicted and later exonerated have won the battle over the justice system, however this is rarely the case. Exonerees experience great amounts of hardship once released back into society. There are flaws in the justice system, which make it extremely difficult for exonerees to experience true freedom. Wrongful convictions occur not only in the United States, but also across the entire globe. It is a serious injustice when an innocent person is forced to experience life as a convicted felon.

Cynthia Cooper was contemplating over this whole debacle with what was the right decision to make with her discovering “almost four billion dollars in questionable accounting entries”. (Mead) While contemplating something crossed her mind on deciding if she should speak up and become known as a whistleblower, is that her findings could cost WorldCom’s credibility, about seventy thousand employees would lose their jobs, and also pension funds that were loaded with WorldCom stock. Her job as an internal auditor she had a responsibility to WorldCom’s Stockholders and also her own conscious to do something like as the fraud that was uncovered was so

The company became successful through the process of buying over 65 assets, and enormous about of money spent. After the internet downfall the company stocks had increased, but putting the company into a lot of debt. Worldcom was soon to be discovered by wall street bankers, investors, etc. Later to become one of the second largest long distance telephone company in the United States. The accounting collapse didn't happen right away. However from the early 2000s Bernard Ebbers, and other employees used fraud and invalid accounting procedures to deceive investors and others. Some people saw it as an honor, until it was involved in one of the largest accounting crimes in American History, Worldcom led to bankruptcy. "WorldCom then admitted to inflating its profits by $3.8 billion over the previous five quarters. A little over a month after the internal audit began, WorldCom filed for bankruptcy.When it emerged from bankruptcy in 2004, WorldCom was renamed MCI. Former CEO Bernie Ebbers and former CFO Scott Sullivan were charged with fraud and violating securities laws. Ebbers was found guilty on all counts in March 2005 and sentenced to 25 years in prison, but is free on appeal." (Case Study: Worldcom, Lee Ann

The stakeholders in this fraudulent case of WorldCom consist of Bernie Ebbers, Scott Sullivan, Buford Yates, David Myers, Cynthia Cooper, and Betty Vinson belong to the company. While the other stakeholders would consist of the creditors, Andersen (accounting firm), investors, and the public. This fraudulent act committed within WorldCom impacted every single stakeholder in a way. Either in a negative or positive way, most of the impact was caused with harm to everyone. The main individuals such as Ebbers, Sullivan, and Vinson all had major consequences as resulting with the fraud. Criminal trials were a major result with their fraudulent acts within WorldCom. Cooper was a lifesaver by most of the community. Aside from these individuals, the rest also got affected by the fraud. Investments conducted by the investors were all lost within the fraud process. The impact towards much of the image for Andersen was ruined. Many of the public lost their trust on the honesty and professionalism of Andersen and other certified public accounting firms. The entire employees from the top management to the smaller group of workers stayed unemployed and some with criminal punishment.

The time frame is early 2002, and the news breaks worldwide. The collapse of corporate giants in America amidst fraud and stock manipulations surfaces. Enron, WorldCom, HealthSouth and later Adelphia are all suspected of the highest level of fraud, accounting manipulation, and unethical behavior. This is a dark time in history of Corporate America. The FBI and the CIA are doing investigations on all of these companies as it relates to unethical account practices, and fraud emerges. Investigations found that Enron, arguably the most well-known, had long shredding sessions of important documents and gross manipulation of stocks and bonds. This company alone caused one of the biggest economic

Sherron Watkins, former Vice President of Enron, attempted to inform the accounting situation to Lay regarding an “elaborate accounting hoax,” before the company went bankrupt. However, instead of being rewarded, Watkins got demoted from top floors, an executive suite, to an older office. Her computer hard drive and work materials got confiscated and she also got a warning to be fired. Enron and Lay did not fix the problem but rather concealed more accounting inaccuracies which eventually led to the loss of 4,500 jobs, loss of $ 60 billion shareholders’ investments and the loss of employees’ pension

It is clearly seen that there is the violation of the laws as Ebbers used allegedly funds for other business ventures and drop down the stock price which brought questions to WorldCom as “Earning”. The staff within the company did not want whistleblower for a fugitive false account. There are laws that required to follow at the corporate level.

The thing that caused this fraud was the strategy of WorldCom 's CEO, Bernie Ebbers.

On March 15, 2005 former CEO of WorldCom, Bernard Ebbers sat in a federal courtroom waiting for the verdict. As the former CEO of WorldCom, Ebbers was accused of being personally responsible for the financial destruction of the communications giant. An internal investigation had uncovered $11 billion dollars in fraudulent accounting practices. Later a second report in 2003 found that during Ebber’s 2001 tenure as CEO, the company had over-reported earnings and understated expenses by an astonishing $74.5 billion dollars (Martin, 2005, para 3). This report included the mismanagement of funds, unethical lending practices among its top executives, and false bookkeeping which led to loss of tens of thousands of its employees.

WorldCom was the ultimate success story among telecommunications companies. Bernard Ebbers took the reigns as CEO in 1985 and turned the company into a highly profitable one, at least on the outside. In 2002, Ebbers resigned, WorldCom admitted fraud and the company declared bankruptcy (Noe, Hollenbeck, Gerhart, &Wright 2007). The company was at the heart of one of the biggest accounting frauds seen in the United States. The demise of this telecommunications monster can be accredited to many factors including their aggressive-defensive organizational culture based on power and the bullying tactics that they employed. However, this fiasco could have been prevented if WorldCom had designed a system of checks and balances that would have

Wall Street can have a heavy influence on a company such as Enron's ethical standings. During the Enron debacle, Wall Street played a key role in the decision-making process for the leadership team of Enron. Wall Street roles in determining Enron's overall value as the company influenced Enron to push the boundaries of ethical standards. During the trial of Enron's executive's former Internet division chief of Enron Ken Rice testified: "That he and his co-conspirators chose to lie about their network's capabilities to gain credibility on Wall Street and boost Enron's stock value." (Flood, 2005) Enron's decision to inflate their values to Wall Street did exactly what the company executives wanted and the company's stock value skyrocketed. "Wall Street obediently obliged, inflating Enron's share value by as much as 75% from the time the company started bragging about its prospects." (Lashinsky, 2001) When Enron's bubble finally burst and

This paper will discuss the corporation WorldCom, a telecommunications company that was based in Mississippi. In 2002 WorldCom was involved in one of the largest accounting scandals in the United States. WorldCom inflated its assets by nearly $11 billion dollars, which eventually lead to about 30,000 employees losing their jobs, as well as, 180-billion dollars in losses for its investors. The CEO at the time of this accounting fraud was Bernard Ebbers and led to him receiving a 25-year prison sentence. This paper will go into the details of how WorldCom was able to manipulate its accounting records to deceive its internal auditors, as well as, investors.