"Enron is the egregious exception. "

[pynchonoid]

T:
"Enron is the egregious
exception. 
It's certainly not difficult to trust the integrity of
corporate
accounting. And accounting is not propaganda."


"Don't worry.  I'll pull out before I come."


<http://www.guardian.co.uk/worldcom/story/0,12167,959666,00.html>

WorldCom pays record $500m to settle fraud 

David Teather in New York
Tuesday May 20, 2003
The Guardian 

WorldCom, the telecoms company that collapsed in
spectacular fashion last year, is set to pay a $500m
penalty to financial regulators in the US, fifty times
higher than the previous record-breaking fine against
a corporation. 

The agreement with the securities and exchange
commission settles charges that the company misled
shareholders with more than $11bn in accounting fraud.
WorldCom filed for the biggest ever bankruptcy shortly
after evidence of an accounting scandal began to
emerge almost 12 months ago. 

[...] The previous biggest penalty paid by a
corporation in a settlement with the SEC was $10m by
copier-maker Xerox last year for manipulating
revenues. The actual size of the fine against WorldCom
is $1.5bn, but the bankruptcy court will reduce that
to $500m. 

The bulk of the cash will be put into a restitution
fund for shareholders who lost their investments and
are unlikely to get anything back from the
reorganisation under bankruptcy. The amount is tiny
compared with the billions of dollars lost by
shareholders who bought into the firm. 

Fines levied by the SEC more usually end up in
government coffers, but officials are keen to restore
some confidence among investors in Wall Street, which
has been beset by three years of sliding share prices
and outrage at the misbehaviour of corporate
executives and investment banks. [...] 

Criminal investigations are still going on at
WorldCom. Federal prosecutors have secured guilty
pleas from four former WorldCom bosses, including the
controller and the former director of general
accounting, who have admitted participating in schemes
to inflate the company's earnings. 

The man accused of orchestrating the alleged fraud,
former chief financial officer Scott Sullivan, is
scheduled to stand trial early next year and has
denied the charges. 

Bernie Ebbers, the former WorldCom chief executive,
who is also still under investigation, last week
missed the first instalment on more than $400m in
loans he took from the company. [...] 



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