WorldCom Admits Fraudulent Accounting Practices
On June 26, 2002 WorldCom Inc. - now renamed MCI - was charged with fraud after admitting it had hidden $3.8 billion of costs. In the first quarter of 2002, WorldCom incorrectly reported cash flow of $240 million, rather than a loss of about $557 million. WorldCom stock fell to just 5 cents from a high $60.00 a few years ago, resulting in the largest bankruptcy to date.
WorldCom's primary investment bank was Salomon Smith Barney, a division of Citigroup. While the widespread belief is that no one at Citigroup knew that billions of dollars were falsely listed as assets instead of expenses, attention has been drawn to the relationship between WorldCom and Salomon Smith Barney's analyst Jack Grubman.
In a settlement with the SEC, WorldCom acknowledged that, as a result of improper accounting, it materially overstated the income it reported on its financial statements by approximately $9 billion.
If you have suffered losses due to WorldCom stock fraud, contact the Consumer Justice Group immediately for an evaluation of your case.
The Investment & Stock Fraud News is a service of the Consumer Justice Group.