• a major telecommunications company that operates a global facilities-based communication network that provides international data, and internet service

Scandal

• lack of oversight, ignoring of accounting principles, and committing fraud

• Arthur Andersen was found to have ignored memos from WorldCom executives, informing them than the company was inflating profits by improperly accounting for expenses

• Financial records indicate fraudulent inflation of the company’s asset by $11billion

• Classifying expenses as capital investment between 1999-2002 inflating profits & hiding losses ( $3.8 billion )

• Bernard Ebbers sentenced 25 years in state prison required to pay restitution to the stakeholders & bond holders $500million in cash & 10 million in shares of MCI

• Scott Sullivan sentenced to 5 years in prison

People Involved

• Bernie Ebbers

  • One count of securities fraud

  • One count of conspiracy

  • Seven counts of fraud related to SEC filings

• Scott Sullivan

  • Testifying against Ebbers

• Cynthia Cooper

  • Former employee exposing corporate fraud