Bernard John Ebbers is the former CEO of WorldCom. WorldCom committed into fraud and conspiracy because he did false financial reporting and eventually cause loss to investors and the amount of loss is USD 100 billion which is a huge amount. Bernard John Ebbers had to distribute more than USD 6.13 million to more than 830000 individuals and institutions who held WorldCom’s stocks and bonds. Bernard John Ebbers agreed to give up a portion of his assets which included his home, his interests in a lumber company, hotel, marina, thousands acres of real estate, and golf course later on. Bernard John Ebbers was left with only USD50000 in his total assets reported by the newspaper. In addition, he was sentenced to 25 years of prison.
Corporate greed, by definition, is when a company chooses to place significance on increasing profits in a way that harms employees, consumers and the environment. It occurs when making money becomes the only goal, and the other company’s social responsibility is ignored. There is some debate with companies over whether they are being greedy versus looking for the best business practice. How can one tell if a company’s practice is defined as corporate greed or if the company is just working to reduce costs in order to increase profit growth? How much social responsibility does a company have to society and the environment? An article written by Edmund Bradley, about the problem with corporate greed, gave a perspective on these
The Supreme Court case was argued on June 26, 1971 and decided on June 30, 1971. It affirmed the verdicts of the District Court for the Southern District of New York & the District Court for D.C. and the Court of Appeals for the D.C. (New York Times Co. v. United States).
In this political cartoon, you can see that there are 8 people on land, just on the edge of land, calling out for a ship that has just sailed called “Corporate Greed”. Above their heads are some text bubble saying, “Don’t go!” “Come back!” and, “Our jobs!” There are even two people chasing the ship by swimming after it.
There is a vast difference between the cigarette commercials of the 1980's and the anti-tobacco Truth ads of today. We were sold a lie, and now many have paid the price with their health and their life. Should it be the responsibility of the tobacco industry to care for these people who have life threating illnesses caused by their products? Should they also handle the burial of the individuals who die as a result of tobacco usage? In this industry, someone has to look out of the consumers that are not looking out for themselves.
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.
We Americans have been lied to. The Founding Fathers saw the danger of corporations and big banks before the Industrial revolution even touched our shores. The created laws which the corporations and the traitors in the Supreme Court eroded to nothing, by the start of the Civil War. But in at the start of the US corporations were not allowed to own each other, nor was one person allowed to sit on the board of two corporations. Corporations were barred from spending money on elections and other public matters. Depending on the state either the public in general or the Secretary of State specifically, had permanent access to a corporation's books, so they could not hide behind creative accounting. the Lie started when they change the history
This leads into my second pressure, which deals with personal lives. Employees were receiving tremendous benefits due to the company’s great performance. However, if the company did not improve, people’s salaries would be cut or even worse, their jobs would be cut. That is why so many people were willing to engage in the fraud, because they felt WorldCom was supplying a salary and benefits that other companies would not be able to match. Betty Vinson was a prime example. She knew that releasing line accruals was wrong, but needed to
Due to these criminal activities, many top executives were convicted fraud and sentenced to spend time in prison. WorldCom activities did not align with the company's overall mission and goals. The actions taken by management were not in the best interest of the customer instead they were consumed with acquisitions and increasing the value of WorldCom Shares. The management also should have considered general accounting practices during their strategic planning. Furthermore, create procedures that protect all stakeholders within the firm.
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.
MCI is at a critical point in their company history. After going public in 1972 they experienced several years of operating losses. Then in 1974 the FCC ordered MCI's largest competitor AT&T to supply interconnection to MCI and the rest of the long distance market. With a more even playing field the opportunities to increase market share and revenue were significant. In order to maximize this opportunity MCI required capital. Their poor financial performance required them to use less traditional instruments to obtain financing. The capital acquired supported their growth until they reached a level of profitability in 1978. Subsequently they continued to increase their net income and the quality of
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
However, the WorldCom’s stock price still declined. This incapacity in declining profits led to the withdrawal of merging with Sprint forced by the U.S. Justice department. In addition, banks put increasing burdens on Bernard Ebbers to pay back the loans that he used to invest in his other businesses. Ebbers soon felt the need to display an stable and increasing revenue and profits. His idea to meet this goal was financial gimmickry. The problem was that this was a last resort and involved deception. The more perplexed it became, the riskier to continue in this way. In general, cheat was just not an applicable way in the long run. In 2001, Bernard Ebbers convinced his board of directors to provide a loan of $400 million to cover up his debt who hoped that this strategy could stop the decline in WorldCom’s stock price. However, this strategy failed and led to further decrease in the price of WorldCom’s stock price. All of those changes in company loss ended up $1.38 billion in 2001. In 2002, a team of employees at WorldCom worked together to investigate and reveal the $3.8 billion worth of fraud. Soon or later, the board of directors were notified of this fraud and made many resignations. After some irregularities were spotted in MCI’s magazines, the Security and Exchange Commission requested WorldCom to provide more information and started to investigate into the fraud. SEC was skeptical of WorldCom’s enormous earning on the