Word: worldcom
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Dates: during 2000-2009
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...paper trail. He didn't like e-mail, preferring to give vague orders to subordinates, like telling his chief financial officer, Scott Sullivan, to "hit the numbers." According to Ebbers' trial lawyer, Reid Weingarten, there was no smoking gun, no hard evidence to implicate the former chief of WorldCom--a college dropout, Sunday-school teacher and small-town basketball coach--as the orchestrator of the largest accounting fraud in U.S. history. "You thought you could trust him," says Alex Bryant, an ex--WorldCom sales manager in Springfield, Mo. Soon after WorldCom bought MCI, Bryant recalls, Ebbers addressed a group...
Perhaps most unsettling for CEOs in the hot seat is that Ebbers was convicted despite scant evidence connecting him to the crime. The prosecution's star witness, former CFO Sullivan, admitted in court to drug use, lying to WorldCom's board and filing false financial statements. Yet while most of the jurors didn't find Sullivan very credible, it was even less plausible that Ebbers would not have detected accounting fraud on such a massive scale right under his nose. As the jury heard, this was a man so obsessed with saving a buck that he sniffed...
...king Michael Milken, for instance, served only 22 months for securities fraud. Now CEOs must recognize the risks of an "I didn't know" defense and face the prospect of monumental consequences to go along with their monumental pay packages. That Ebbers lost hundreds of millions himself in the WorldCom collapse--buying more stock even as the company imploded--did nothing to insulate him from the wrath of the jury...
...know what I don't know. To this day, I don't know technology, and I don't know finance or accounting." BERNIE EBBERS, former WorldCom ceo, testifying that he had no knowledge of illegal accounting practices at his company in his trial for fraud...
Corporate watchdogs were panting last week as not one but three former CEOs started trial: WorldCom's Bernard Ebbers, HealthSouth's Richard Scrushy and Tyco's Dennis Kozlowski, with the latter back in court after a mistrial. --By Julie Rawe...