WorldCom will be delisted July 5 unless it requests a hearing to stay the delisting.
The NASDAQ National Market notified WorldCom Inc. that its securities will be delisted at the opening of business July 5 unless the company requests a hearing to stay the delisting. The notification follows last weeks disclosure by WorldCom that it improperly reported more than $3.8 billion in expenses as assets
According to WorldCom, NASDAQ said the Clinton, Miss., telecommunications carrier failed to comply with filing and fee requirements and is subject to being removed from the market.
Today, the U.S. District Court ordered WorldCom to preserve financial documents and assets, and announced that it will appoint a corporate monitor to prevent "unjust enrichment" by company officers based on the alleged fraudulent conduct. Until the monitor is appointed, WorldCom cannot pay more than $100,000 to any current or former officer, director or employee.
The monitor will also ensure that WorldComs assets are not spent on items unnecessary to continued operations. The court order resulted from a joint agreement between the U.S. Securities and Exchange Commission and WorldCom.
Responding to an order issued last week by the SEC, WorldCom disclosed that it is reviewing financial records back to 1999. The company is restating its financial results for 2001 and 2002 after discovering that certain operational expenses, primarily payments made to other carriers for terminating their calls, were improperly recorded as assets.
The SEC began investigating WorldComs accounting practices in February but accelerated the investigation last week by filing formal charges of $3.8 billion in fraud.
WorldCom President and CEO John Sidgmore said today in a prepared statement that the company has pledged to be forthright and cooperate with the investigations.
"We will continue to be proactive in reviewing our operations and reporting our findings," Sidgmore said. "This company is absolutely committed to operating in accordance with the highest ethical standards."
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