Feeds

WorldCom settles with SEC

Still in rehab

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

ComputerWire: IT Industry Intelligence

The US Securities and Exchange Commission drew a line under its fraud action against WorldCom Inc yesterday, when the embattled telecoms carrier agreed to a partial settlement in the case.

The move marks a major step forward in Clinton, Mississippi-based WorldCom's rehabilitation effort yesterday, and its efforts to emerge from chapter 11, although the SEC reserves the right to seek a penalty from the company in the future.

The agreement also represents a relatively rapid conclusion to the SEC's civil fraud action against WorldCom, which was launched in June after the company made the first in a series of financial restatements that eventually topped $9bn, and pitched it into chapter 11. When WorldCom's financial misstatements first became apparent the SEC condemned what it described as "improprieties of unprecedented magnitude". Earlier this month, it expanded its case against WorldCom, saying the company had misled investors from at least 1999.

Under the partial settlement, WorldCom neither admits or denies the commission's allegations. WorldCom has agreed "not to violate securities laws in the future". It also pledges to ensure its senior operational officers and financial reporting personnel receive training to minimize the possibility of future violations. It will retain a consultant to review the effectiveness of its internal accounting and agreed that the corporate monitor in the case will review its corporate governance and ethics policies.

It is understood that agreement ends the threat of action from the SEC. Even if further accounting misdeeds under its previous management are uncovered at the firm, these will be considered to be "in the past" and will not prompt further legal action by the SEC.

WorldCom's senior management has been culled since the accounting scandal first broke in June. Both its former CFO Scott Sullivan and former controller David Myers are facing action over their role in the financial misstatements. Yesterday's move by the SEC does not affect those cases.

In a statement, president and CEO John Sidgmore, said the agreement was in line with steps it had already taken to restore confidence in the company, and "provides additional reassurance that WorldCom's plan to emerge from bankruptcy remains on schedule."

© ComputerWire

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Forget silly privacy worries - help biometrics firms make MILLIONS
Beancounter reckons dabs-scanning tech is the next big moneypit
Microsoft's Office Delve wants work to be more like being on Facebook
Office Graph, social features for Office 365 going public
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
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?
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.