Word: worldcom
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Soon after worldcom CEO John Sidgmore revealed the most sweeping bookkeeping deception in history, a marked-up copy of his internal memo on the scandal was e-mailed to folks around the telecom industry. Under his predecessor, Sidgmore announced, WorldCom had overstated a key measure of earnings by more than $3.8 billion over five quarters, dating back to January 2001. The company's reported profits, it turned out, were really losses. In his memo to employees explaining America's latest corporate disgrace, Sidgmore wrote last Wednesday, "Our customers can count on WorldCom to meet their communications needs today and tomorrow...
...WorldCom--once big and rich enough to swallow No. 2 long-distance carrier MCI--struggles to survive, it is laying off 17,000 workers. Its stock, which peaked at $64.50 three years ago, stopped trading last Tuesday at 83[cents], having all but wiped out employee retirement accounts. The plunge in WorldCom shares has cost investors upwards of $175 billion--nearly three times what was lost in the implosion of Enron. WorldCom is not yet financially bankrupt, but it's clear that it--like a fat slice of corporate America--has been ethically bankrupt for years. We're only...
...context of recent developments, President Bush's musings on CEO responsibility are as understated as the expenses in WorldCom's financial statements, the flashpoint for new worries of widespread accounting abuse. WorldCom said that an internal review uncovered huge hidden expenses--mostly line charges that it pays to other telecom carriers--that were characterized as capital investments, a gimmick that boosted its profits...
...apples and oranges," insists Communications Director Dan Bartlett comparing the accounting practices at WorldCom and Enron and those that led to a 1990 SEC investigation and restatement of Harken's earnings. The distinction, say administration officials, is not only that Harken's restatement was in millions, not billions, but also that the company was merely caught being aggressive, not fraudulent. Many corporate executives currently under the bright lights are saying a version of the same thing...
...culprits of Enron and Tyco, WorldCom and Wall Street are now being described as the largest gang of upper-income banditti since the Ponzi, Insull, bank and bucket shop defendants of the early thirties. The recent peak-to-trough decline of nearly 75% in the tech-heavy Nasdaq also happens to represent the steepest decline in a major stock market index since the Dow Jones Industrial Average fell more than 80% between...