Jun 27, 2002 : WorldCom Charged With Fraud
📅 - US regulators charged telecommunications firm WorldCom Inc. with fraud on Thursday after the company's Tuesday admission that it had improperly accounted for almost $4 billion had profound effects on Wednesday's markets.
The Securities and Exchange Commission (SEC) filed a civil lawsuit in a New York federal court, charging WorldCom with acting to manipulate earnings to keep them in line with Wall Street expectations. SEC chairman Harvey Pitt said the suit was intended to prevent WorldCom from selling assets, destroying documents or making payouts to executives.
President Bush demanded a full investigation into the scandal, which rivals the one surrounding the collapse of bankrupt energy company Enron.
Arthur Andersen, the auditor that was convicted earlier this month of obstructing a probe in relation to the Enron case, was also responsible for auditing WorldCom's books last year. Andersen, however, says it was not given access to the relevant material in conducting its audit.
While the financial impact of the scandal has not been fully calculated, WorldCom is said to owe banks around the world about $4.5 billion dollars, and the estimated exposure of US insurers is around $5.4 billion.
Despite the company's cost-cutting reactions, Analys are confident that WorldCom is headed for bankruptcy, which would make it the largest bankruptcy filing in US history, double the size of last December's Enron collapse.
The Securities and Exchange Commission (SEC) filed a civil lawsuit in a New York federal court, charging WorldCom with acting to manipulate earnings to keep them in line with Wall Street expectations. SEC chairman Harvey Pitt said the suit was intended to prevent WorldCom from selling assets, destroying documents or making payouts to executives.
President Bush demanded a full investigation into the scandal, which rivals the one surrounding the collapse of bankrupt energy company Enron.
Arthur Andersen, the auditor that was convicted earlier this month of obstructing a probe in relation to the Enron case, was also responsible for auditing WorldCom's books last year. Andersen, however, says it was not given access to the relevant material in conducting its audit.
While the financial impact of the scandal has not been fully calculated, WorldCom is said to owe banks around the world about $4.5 billion dollars, and the estimated exposure of US insurers is around $5.4 billion.
Despite the company's cost-cutting reactions, Analys are confident that WorldCom is headed for bankruptcy, which would make it the largest bankruptcy filing in US history, double the size of last December's Enron collapse.
Reads: 1787 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/wor062702.cfm
Want to add a website news or press release ? Just do it, it's free! Use add web hosting news!
📅 - 
📅 -