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Worldcom pay 500m fine { May 19 2003 } Original Source Link: (May no longer be active)    http://news.bbc.co.uk/2/hi/business/3039313.stm http://news.bbc.co.uk/2/hi/business/3039313.stm Last Updated: Monday, 19 May, 2003, 09:23 GMT 10:23 UK WorldCom to pay $500m fine Bankrupt telecoms firm MCI, formerly known as WorldCom, has reportedly agreed to pay $500m (£305m) to victims of its accountancy fraud. The company has reached a settlement with US shares watchdog the Securities and Exchange Commission (SEC), the Wall Street Journal said. The fine is one of the largest levied by the SEC. It will be paid when the company emerges from Chapter 11 bankruptcy and could be announced later on Monday. Illegal practice The fine actually totals $1.5bn, but that figure will be reduced to $500m through bankruptcy proceedings. Settling with the SEC should help MCI emerge from bankruptcy by the autumn, legal experts said. The SEC charged WorldCom in June with fraud. It alleged the company manipulated its financial records to meet Wall Street expectations. The company is expected to restate about $11bn of profits. The basis of the fraud was the illegal practice of reporting various rental expenses as capital investment, allowing the firm to appear vastly more profitable than it ever was. Criminal charges Since its bankruptcy filing in July, WorldCom has hired a new chairman and overhauled its management team. The company has also changed its name back to MCI. Meanwhile, former chief financial officer Scott Sullivan has been charged with securities fraud, conspiracy, and making false statements about WorldCom's financial health in SEC filings. Four other WorldCom executives have pleaded guilty to securities fraud and agreed to co-operate with investigators. Assets seized Two reports reviewing WorldCom's past accounting practices have been delayed at the request of prosecutors, who claim early public disclosure could harm criminal investigations into former WorldCom chief executive Bernie Ebbers and other former executives. In a separate development, Mr Ebbers has defaulted on the first repayment of a $25m loan from MCI, according to the Wall Street Journal. MCI must now seize additional assets belonging to Mr Ebbers, in order to secure the loan, the newspaper said. The company has already sold his Georgia-based yacht-building business for $15m and is close to selling his ranch in British Columbia, the WSJ reported. Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/3039313.stm Published: 2003/05/19 09:23:52 GMT © BBC MMIII

Acquisitions { August 8 2002 } Cfo indicted { August 28 2002 } Ebbers exchief of worldcom is indicted on federal charges { March 2 2004 } Mci att dispute over calling fraud Misteps since 99 { July 2 2002 } Moving hq name mci { April 15 2003 } Outside directors pay 54 million to settling class action Probe expands { July 1 2002 } Wordcom chapter Worldcom bankruptcy Worldcom bbc { June 27 2002 } Worldcom chief given 25 years for huge fraud { July 14 2005 } Worldcom enabled huge fraud { June 10 2003 } Worldcom msnbc Worldcom ny { June 26 2002 } Worldcom pay 500m fine { May 19 2003 } Worldcom [jpg] Files Listed: 17

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