U.S. widens WorldCom fraud charges
Copyright 2002 Toronto Star Newspapers, Ltd.
The Hamilton Spectator…11/06/2002
The U.S. government yesterday expanded its civil fraud charges against WorldCom and the telecom giant raised its estimate of inflated earnings to more than US$9 billion in one of the most stunning accounting scandals in corporate history.
The Securities and Exchange Commission announced that it had broadened the scope of its civil fraud charges, originally filed against the telecom company in June, to include an additional charge and to allege that WorldCom misled investors starting at least as early as 1999 through the first quarter of this year.
WorldCom is in settlement talks with the SEC.
The second-largest U.S. long-distance carrier, which is operating under bankruptcy court protection, said it told the commission during those discussions that, based on "very preliminary reviews" of its accounting, it expects an additional earnings restatement that could bring the total hole in its books to more than $9 billion.