Word: enronization
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Dates: during 2000-2009
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...losers include pension funds and mutual-fund investors across the country. And, as at Enron, WorldCom's 401(k) plan was full of company stock, socking employees with greatly diminished savings just when they are likely to need them the most. Says John Alexander, 31, a former WorldCom benefits manager: "Everything they ever told us was, 'We're making money hand over fist.'" Alexander lost $180,000, a large chunk of his life's savings...
...developments at WorldCom suggest that accounting games may be more pervasive than we had thought. With Enron, the tricks involved complicated partnerships, off-the-books debt and exotic hedging techniques that made the firm's financial results difficult to assess even for pros. It seemed unlikely that anything so complex could be widespread. But with WorldCom, as House Financial Services Committee chairman Mike Oxley, an Ohio Republican, says, it looks like "good old-fashioned fraud." Oxley's committee subpoenaed Sidgmore, Sullivan, Ebbers and Jack Grubman, telecom analyst for the Salomon Smith Barney unit of Citigroup, to a July 8 hearing...
...WorldCom's auditor--Arthur Andersen, the firm convicted of obstructing justice in the Enron case--somehow missed it. Andersen, which was paid $4.4 million a year to certify that WorldCom's books were honest, says WorldCom CFO Sullivan never handed over the material Andersen requested. "That's like a police officer saying the criminal didn't turn himself in," scoffs analyst Patrick Comack of the brokerage Guzman...
...reports. Over time, net income and cash flow from operations "should move in the same direction and at similar rates," he says. Cash flow is hard to finagle, so if net income rises faster than cash flow, that can be a sign of accounting tricks--as it was at Enron...
...three or four corporate scandals ago, but Playboy is just now catching up to the Enron debacle. The men's magazine invited all female employees affected by the company's demise to send in their pictures. Of the 300 who did, 10 made it into the August issue, now on sale. While most scandal veterans who disrobe for Playboy are already household names, having offered tearful press conferences or congressional testimony, chances are that few readers will have heard of CYNTHIA COGHLAN, CHRISTINE NIELSEN or CAREY LORENZO. But one thing is clear: from the looks of some of the naked...