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.