Former WorldCom CEO Indicted
Bernard Ebbers, former CEO of WorldCom Inc. now doing business as MCI was indicted today for conspiracy and securities fraud for his alleged role in inflating the value of the company's stock in light of its weakening financial condition.Bernard Ebbers, former CEO of WorldCom Inc. now doing business as MCI was indicted today for conspiracy and securities fraud for his alleged role in inflating the value of the companys stock in light of its weakening financial condition. The charges came shortly after the companys former chief financial officer, Scott Sullivan, pleaded guilty to related criminal charges. In a filing with the U.S. Attorneys Office for the Southern District of New York, U.S. Attorney General John Ashcroft announced at a press conference in Manhattan this afternoon that the U.S. government has charged that Ebbers, Sullivan and other WorldCom officials knew about the companys poor finances, but that Ebbers insisted that false results be reported publicly. Ebbers and Sullivan agreed that fraudulent entries would be made in the companys books, including revenue, income, line cost expenses, earnings per share and EBITDA, the government charged. Ebbers and Sullivan were also charged with making false statements and misleading omissions in conference calls with securities analysts. In February, 2000, for example, Ebbers is reported to have said in an interview that WorldCom was a "sound financial company."
According to a Department of Justice spokesman, Ebbers is expected to be arraigned tomorrow. The former WorldCom executives could face a maximum sentence of 5 years in prison for the conspiracy charge. The securities fraud counts each carry a maximum sentence of 10 years in prison.