Oklahoma AG takes aim at WorldCom, Ebbers
Call it WorldCom, MCI or whatever you like. It appears no amount of name changing will help the bankrupt telecommunications company shake its tainted past.
Oklahoma's Attorney General Drew Edmondson has become the latest member of the WorldCom bashing brigade, levying some serious charges against the company and its former executives. The Oklahoma AG is madder than a strapped down steer as a result of WorldCom's past accounting scandals and suspect actions. He joins WorldCom's rivals, some senior citizens and a host of others that want to see the telco pay up for its dark deeds.
Oklahoma claims it is the first to seek criminal charges against WorldCom. It has filed felony charges against the company and former employees, including Chief Executive Officer Bernard Ebbers, Chief Financial Officer Scott D. Sullivan, Controller David F. Myers, Director of General Accounting Buford T. Yates, Jr., Director of Management Accounting Betty L. Vinson and Director of Legal Accounting Troy M. Normand.
"We allege the company and these six employees executed a scheme to artificially inflate the value of WorldCom stock and bonds by intentionally falsifying information filed with the Securities and Exchange Commission," Edmondson said, in a statement. "Securities analysts and the investing public, including the State of Oklahoma, rely on this information when making investment decisions.
"It is rare that we name a company in a criminal complaint, but in this case it is justified. The decision to commit this fraud was a company decision. This is not some rogue employee trying to line his own pockets. This was a conscious decision made for the benefit of the company."
Them be fighting words.
The Oklahoma AG reckons that state pension funds dropped by tens of millions of dollars due to WorldCom's collapse. The fine people of Oklahoma suffered as well.
For its $11 billion accounting scandal, the SEC ordered WorldCom to pay $750 million in cash and stock. Numerous organizations argue this wasn't quite enough for a debacle that cost investors close to $200 billion. Go figure.
More AGs may follow Oklahoma with suits of their own.
Under its new MCI monicker, the company has tried to clean house by bringing in new management and setting up more stringent policies for reporting fraud. MCI wants to move away from its past and emerge from bankruptcy later this year with a clean slate.
Good luck. ®