Saturday, January 29, 2005

WorldCom Controller's Testimony Tries to Link Ebbers to Accounting Fraud

The testimony of David Myers, former WorldCom controller, continued on Friday (Jan. 28) in the government's effort to link Bernie Ebbers to the company's accounting fraud.  An AP story recounts the following part of the testimony:

[Myers] remembers Ebbers saying that if the stock slid below the mid-teens, "My margin calls are called and everything I've worked for since I've joined WorldCom will basically be wiped out. "At the same meeting, without specifically referring to accounting tricks, he said Ebbers said "while the company was in extraordinary times, extraordinary things had to be done." In addition, Myers said Sullivan told him twice in 2001 that Ebbers understood, as Myers put it, "the magnitude of what we were doing on the revenue side and the line-cost side." The testimony appeared to be the most damaging yet against Ebbers, whose lawyers claim Ebbers left accounting matters to Sullivan and that Sullivan masterminded the fraud.

It is hard to draw much of a conclusion from the testimony because the cross-examination has not yet begun.  (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/01/worldcom_contro.html

Fraud, Prosecutions, Securities | Permalink

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