Worldcom

WorldCom finds accounting fraud By Andrew Backover, Thor Valdmanis, Matt Krantz and Michelle Kessler USA TODAY WorldCom has engaged in what could be one of the biggest financial frauds in history and exit restate pelf for the past five quarters. The news, released Tuesday, is bound to wind up already low investor confidence and increases chances that the No.2 long-distance company may have to seek bankruptcycourt protection. WorldCom fired Chief Financial incumbent Scott Sullivan. It said it overstated cash flow by $3.9 one million million million for 2001 and the setoff quarter of 2002 by booking ordinary expenses as capital expenditures â€" which dressed up the books. Otherwise, WorldCom says, it would have posted a loss last year instead of net income of $1.4 billion, and a loss for the first quarter of 2002 instead of net income of $cxxx million. Telecom analyst Tom Lauria estimates WorldComs loss for 2001 could top $1.5 billion. The Securities and change over Commission, already reviewing WorldComs accounting, has launched a highlevel probe. Executives found guilty could face well-bred and criminal penalties, say people familiar with the situation. Our senior way team is shocked by these discoveries, said CEO deception Sidgmore in a statement. He replaced ousted CEO Bernard Ebbers in April.

The news, first reported by CNBC, sent WorldCom shares down 76% to 20 cents in after-hours trading. The fraud could result in an earnings restatement rivaling the biggest yet: Rite Aids $1.6 billion net-income restatement in 2000. Analysts were overly shocked. I couldnt believe it. This is mind-boggling if its true, says Patrick Comack, analyst at Guzman & vitamin A; Co. WorldCom has 20 million customers and serves some of the worlds largest businesses. It was among the bestperforming stocks in the 1990s, peaking at $64.50 in 1999. It used dozens of acquisitions to grow from a start-up to big-time player. In 1998, it acquired MCI in what was then the biggest merger ever. Sullivan was... If you want to get a full essay, order it on our website: Ordercustompaper.com

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