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What Is The Worldcom Sec Case

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On 26th June 2002, the SEC has filed fraud charges against WorldCom. The SEC also filed a proposed settlement of claim for civil penalty on WorldCom in May 2003. The Commission has claimed that Worldcom practiced undisclosed and improper accounting and has misled their investors from at least as early as 1999, thus resulted in overstate of its income. The Oklahoma Attorney General filed charges against WorldCom and Ebbers for violating securities laws by providing investors with false financial information in August 2003. Ebbers pleaded not guilty, but he was found guilty by the SEC in March 2005 on all counts of conspiracy, securities fraud and filing false documents and was sentenced to 25 years in prison on 13th July 2005. He has been free on bail until results of his appeal were decided. The jury in the Manhattan trial held Ebbers responsible for fraudulent practices which leads to the biggest bankruptcy in US corporate history. Ebbers was also sued by MCI in July 2004 for the $341 million in personal loans. …show more content…

Sullivan. Sullivan was charged with involving in a fraudulent scheme to hide WorldCom’s poor financial performance. In March 2004, Sullivan pleaded guilty on the criminal chargers and decided to testify in criminal case against Ebbers in return for a reduced sentence of five years. He was the main witness of Ebbers’s prosecution and the only person who testified that he discussed the WorldCom fraud directly with Ebbers. Besides settling charges with the SEC, Sullivan also agreed to be suspended for a lifetime from being an officer of any publicly traded

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