WorldCom Telecommunications conducted one of the largest accounting frauds in U.S. history. The total fraud at WorldCom amounted to a staggering $79.5 billion (Romar). WorldCom was originally founded in 1983 as LDDS Communications, it became the nation's second-largest long-distance company and the largest handler of Internet data, it was built through rapid acquisitions and the stock for the company was soaring (Romero and Atlas). The company soon came to its demise when it began falsely portraying itself as a profitable business when in actuality it was not. While continuing into debt, WorldCom, with the help of its officers, was able to create a fictional profit margin in order to make their stocks seem more valuable than what they were. During my research, I was able to uncover how one of the largest communication companies could pull a fast one on such a large number of STAKEHOLDERS and associate its company name to a list of criminal activities. …show more content…
Ebbers’ personal fortune was largely based on WorldCom shares, and he had borrowed nearly $400 million with those shares as collateral (Ackman). In his criminal trial, he was said to have persuaded CFO Scott Sullivan and Senior Vice President David Myers to fabricate the numbers in their financial books in order to hide $3.8 billion in expenses and capital investments. At first Myers refused to comply with the unethical request from CFO Sullivan, but later he was approached by Ebbers who assured Myers this would only be a one-time occasion, and they would make up for it in the next quarter (Tchividjian). Ebbers was pressuring them to doctor the numbers due to the decrease in stock values after the merger with MCI; investors and Wall Street had certain expectations for an increase in stock based off this merger, so a decrease was out of the