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Scoop Links: WorldCom $3.8B Scandal Eclipses Enron

See WorldCom’s press release... WorldCom Announces Intention to Restate Statements and news links, Reuters, Washington Post and New York Times.

NEWS LINKS

YAHOO/REUTERS

WorldCom Finds $3.8 Billion Error, Fires CFO
Tue Jun 25, 9:29 PM ET
By Peter Henderson

SAN FRANCISCO (Reuters) - WorldCom Inc., the No. 2 U.S. long-distance carrier, on Tuesday said it had fired its chief financial officer after uncovering improper accounting of almost $4 billion in expenses, in the latest financial scandal to rock Corporate America.

WorldCom also said it would cut 17,000 jobs, or more than 20 percent of its work force, starting on Friday, a cost-cutting move expected to save $900 million on an annual basis.

FOR FULL STORY CLICK HERE…
http://story.news.yahoo.com/news?tmpl=story&cid=578&ncid=578&e=1&u=/nm/20020626/ts_nm/telecoms_worldcom_dc_6

WASHINGTON POST

WorldCom Says Its Books Are Off By $3.8 Billion
Criminal U.S. Probe Reported
By Yuki Noguchi and Renae Merle
Washington Post Staff Writers

Wednesday, June 26, 2002; Page A01

WorldCom Inc. said last night that it had improperly accounted for $3.8 billion in expenses and would take a charge against earnings that would wipe out all its reported profits since the beginning of last year. The company fired a top financial officer and accepted the resignation of another. Sources said last night the Justice Department had begun a criminal investigation.

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The charge against earnings is expected to be the largest in business history. The revelation by the nation's second-largest long-distance telecommunications company stunned a business world already grappling with scandal.

FOR FULL STORY CLICK HERE…
http://www.washingtonpost.com/wp-dyn/articles/A44367-2002Jun25.html


NEW YORK TIMES (Registration Required)

WorldCom Says It Hid Expenses, Inflating Cash Flow $3.8 Billion
By SIMON ROMERO and ALEX BERENSON
June 26, 2002


WorldCom, the nation's second-largest long-distance carrier, said last night that it had overstated its cash flow by more than $3.8 billion during the last five quarters in what appears to be one of the largest cases of false corporate bookkeeping yet.

The problem, discovered during an internal audit, throws into doubt the survival of WorldCom and MCI, the long-distance company it acquired in 1998. The company, which was already the subject of a federal investigation into its accounting practices, has been struggling to refinance $30 billion in debt. Its credit was relegated to junk-bond status last month, and even before last night's announcement, the stock price was down more than 94 percent so far this year.

FOR FULL STORY CLICK HERE…
http://www.nytimes.com/2002/06/26/technology/26TELE.html

For comprehensive coverage see also…
http://dailynews.yahoo.com/fc/Business/Telecommunications/

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