Worldcom, The Leading Us Telecommunications Giant Essay

2074 WordsSep 17, 20169 Pages
WorldCom, the leading US telecommunications giant, WorldCom during the 1990s was instrumental in legal and regulatory changes that led to the breakup of the AT&T monopoly of American telephony and steered in the competitive long-distance telephone industry. WorldCom now named MCI, recently emerged in June 2002, Securities and Exchange Commission lawyers filed civil fraud charges against WorldCom for what would later be estimated at over $9 to $11 billion worth of accounting errors. Bernie Ebbers borrowed $336 million to cover stock losses and used loans from WorldCom to fund personal investments such as houses and real estate. He netted about $140 million from the sales of stock. Scott Sullivan directed the staff to make false accounting entries, which personally helped create false and misleading statements and he also netted about $145 million from the sales of stock. The fraud was committed by generating assets out of operating expenses and inflating revenues to continue reporting double-digit revenue growth and false statement of stock prices. WorldCom 's fraudulent, false and improper action of its line cost expenses, was not disclosed to its investors. WorldCom did not disclose to its investors, or elsewhere, that it had executed such changes in its procedures of accounting for line cost expenses. As a result of these fraudulent, false and improper accounting manipulations, “WorldCom materially overstated its earnings as well as its assets and materially

More about Worldcom, The Leading Us Telecommunications Giant Essay

Open Document