May, 2003 : MCI Settles With SEC, Appoints New Board

📅 May 21, 2003 - MCI (mci.com) announced Monday that is has reached a settlement with the Securities and Exchange Commission (SEC) on a civil penalty to be imposed for the company's past accounting practices. Under the terms of the settlement, the company will be found liable for a civil penalty of $1.510 billion. This penalty will be satisfied by a $500 million payment due on the date of the company's emergence from Chapter 11 bankruptcy protection.

MCI is expected to emerge from protection in the fall.
The U.S. District Court and the U.S. Bankruptcy Court ? who are overseeing the SEC lawsuit and the Chapter 11 proceedings ? must first approve the proposed settlement.
"This settlement recognizes our cooperation with the SEC's investigation, the company's acceptance of responsibility for its past accounting practices, and the significant strides we have made in rebuilding MCI as a model of good corporate governance," said MCI's executive vice president and general counsel Michael Salsbury. "This is an important milestone in our progress to emerge from Chapter 11 on schedule this fall."
MCI also reported that it has implemented a number of management, policy and structural changes beyond the provisions of the settlement. This includes appointment of a new Board of Directors, CEO and CFO; implementation of an ethics program, declaration of a commitment to transparency, and engagement of KPMG as its new auditor.
Formerly WorldCom, MCI is a global communications provider that provides advanced communications to businesses, governments and consumers. With a global Internet backbone spanning six continents and 140 countries, MCI serves more than 20 million business and residential customers worldwide.