Ex-WorldCom chief charged with fraud

The state of Oklahoma filed criminal fraud charges on Wednesday against former WorldCom chief executive Bernie Ebbers and five other top executives of the failed telecom giant.

    WorldCom was charged with doctoring stock prices

    It was the first time Ebbers has faced charges in the largest fraud in US corporate history, although some other executives have been hit with federal charges in the probe into WorldCom, which has been renamed MCI.

      

    Oklahoma Attorney General Drew Edmondson said that the charges name, in addition to Ebbers, former chief financial officer Scott Sullivan, controller David Myers, general accounting director Buford Yates, management accounting chief Betty Vinson and legal accounting director Troy Normand.

      

    The six were each charged with 15 counts of violating the Oklahoma Securities Act.

     

    False information

      

    "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.

      

    "Securities analysts and the investing public, including the state of Oklahoma, rely on this information when making investment decisions," he said.

      

    Vinson, Normand, Yates and Myers all pleaded guilty to federal charges last year in New York in a deal with prosecutors that could involve cooperation in the probe into Ebbers and Sullivan.

     

    "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"

    Drew Edmondson,
    Oklahoma Attorney General 

    Edmondson said he charged the company, as well, in the Oklahoma case and the employees, because they all stood to profit from the scheme.

      

    "It is rare that we name a company in a criminal complaint, but in this case it is justified," Edmondson said. "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."

      

    WorldCom collapsed in July 2002 after disclosures of massive accounting fraud, now involving $12 billion.

      

    MCI agreed to pay creditors $750 million in cash and stock as part of its plan to emerge from bankruptcy.

     

    SOURCE: Agencies


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