Feeds

US cracks down hard on WorldCom

Send in the clowns

  • alert
  • submit to reddit

Internet Security Threat Report 2014

ComputerWire: IT Industry Intelligence

The US government declared its intention to haul WorldCom Inc company and its executives over the coals yesterday, with legislators issuing subpoenas against executives and the Securities and Exchange Commission charging the firm with fraud.

The attacks from Washington followed the Clinton, Mississippi-based carrier's announcement on Tuesday that its accounts for the last five quarters featured $3.8bn worth of mis-statements in what is being seen as the US' biggest financial scandal ever.

Yesterday, SEC chairman Harvey Pitt, said in a TV interview that the agency would seek "hard time for hard crime" when it came to "white collar" crime, pledging to make it "so unpleasant, so painful and so impossible" for perpetrators.

Pitt's firebrand comments came as the SEC confirmed it was charging the firm with fraud, saying the misstatements were intended to mislead investors and keep the company's earnings in line with Wall Street estimates. The SEC, amongst other things is seeking orders preventing WorldCom from destroying documentation, or making any extraordinary payments to current or former officers.

Pitt's comments were backed up by US treasury secretary, Paul O'Neill, who said in a TV interview that the executive and congress were considering legislation that would allow the SEC to seize funds of executives involved in corporate fraud cases. In the interview with ABC television, O'Neill said the aim was to ensure that "while these cases are being litigated the money doesn't flow away and can be redistributed to employees and shareholders." He added that CEOs should be held responsible for being aware of any information that could affect a company's value, and that they should face criminal prosecution if accounts are exposed as false.

Meanwhile, congress stated its intention to investigate the WorldCom debacle. The House Committee on Financial Services issued subpoenas to WorldCom executives, including CEO John Sidgmore, and former CEO Bernie Ebbers, ordering them to appear before it on July 8.

And if it felt like the WorldCom scandal is already becoming a circus, the clowns have certainly arrived. A slew of shareholder lawsuits were announced by law firms yesterday, with WorldCom, former CEO Bernie Ebbers and WorldCom's accountants, Arthur Andersen all being targeted.

© ComputerWire

Related stories

Bush, SEC gang up on WorldCom
Worldcom engulfed in $3.8bn accounting scandal

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
'Cowardly, venomous trolls' threatened with TWO-YEAR sentences for menacing posts
UK government: 'Taking a stand against a baying cyber-mob'
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.