March 3, 2004

Nailing Slime

ebbers.jpg With yesterday's indictment of former WorldCom CEO Bernie Ebbers on securities fraud charges, the final chapter in the long, sad story of MCI will be written. Now it is becoming clear that -- far from a "hands off" executive who knew little about accounting -- Ebbers was obsessed with small matters (like free coffee and whether employees were using too many pencils) and directed WorldCom's deception of investors from the start. WorldCom Prosecutors Say Ebbers Began Fraud Long Before Debacle [bloomberg.com]

Around September 2000, after reviewing an internal report on WorldCom's results the prior two months, [former CFO Scott] Sullivan told Ebbers the company would fall short of analysts' forecasts that quarter, according to the 31-page indictment, which was unsealed yesterday. When Sullivan said WorldCom should announce the shortfall then, Ebbers refused, and they agreed to conceal the company's condition, the government said.

That's the key. Bernie was a Wall Street darling if he "met his numbers." The only way to keep the stock moving up with demand and revenue falling during the telecom sector meltdown that started in 2000 was to cook the books. Nothing is too little punishment for this sort of corporate slime. I've got scores of former MCI friends and clients who lost fortunes, and now are scrambling just to make ends meet, because of this bastard.

Bernie, your days as a free man are numbered. Hallelujah!!

 Posted by glenn

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