Word: worldcom
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Dates: during 2000-2009
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...didn't yield smarter investors. In the 1990s, employees at some fast-growing companies kept up to 90% of their 401(k)s in company stock. When Enron and WorldCom tanked in 2001 and '02, they each took more than $800 million in savings with them, prompting landmark lawsuits. The current meltdown has skimmed about 20% from 401(k)s since 2007 and ignited debate over their retirement-income reliability. "Unlike Wall Street executives, American families don't have a golden parachute to fall back on," said California Representative George Miller at an Oct. 7 hearing on retirement savings...
...know what they were doing. Credit raters, who claim to offer only opinions, are party to Wall Street's cycles too. At the beginning, they're far too lenient with borrowers, who are the ones who pay their rating fees. Then, after a couple of embarrassments - remember Enron and WorldCom? - the raters tighten up, maybe too much. Then memory fades, and the cycle repeats...
...seen a version of this game before. Enron, PSINet, Trans World Airlines and WorldCom all paid out for naming rights at U.S. sporting arenas before going under earlier this decade. In fact, sponsors of major U.S. sports stadiums lost an average of 33% of their market value in 2002, roughly double the Dow's fall that year...
...month after an accounting scandal made headlines, the telecommunications company, once the second largest long-distance carrier in the U.S., filed for bankruptcy. Several WorldCom executives subsequently pleaded guilty to fraud charges, with CEO Bernard Ebbers sentenced to 25 years in prison. The company emerged from bankruptcy...
...reputation," says Daniela Bergdolt of the German Association for the Protection of Securities Ownership. "They hope that if they show remorse, it will reduce the penalty." And while it still seems far-fetched to imagine any German business titan seen doing the perp walk like American Bernie Ebbers of WorldCom, for instance, the case could mark a sea change for corporate Germany...