Yet Another Blow to Arthur Andersen

Just reported in the Wall Street Journal Online:Starting in early 2001, Worldcom overstated profits by $3.8 BILLION — making it one of the largest accounting frauds in history.

According to the article, Arthur Andersen was fired in January this year and replaced by KPMG.

Again, like Enron, Worldcom’s Chief Finanical Officer, Scott Sullivan, hid costs on the balance sheet, boosting profits.

In April, Worldcom’s CEO resigned amid criticism of a $366 million personal loan. Where on Earth was the CFO? Oh yeah, he was a personal friend of the CEO.

We can only hope for many criminal indictments, including the Board of Directors, given the total absence of fiduciary responsibility to the stockholders, not to mention employees.

Worldcom’s stock closed today at 83 cents. It peaked at $64.50 in June ’99.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s