Ex-WorldCom trio agree to settlement

Three fraudulent ex-WorldCom executives have agreed an undisclosed financial
settlement with investors in the telecoms company over the biggest accounting
scandal in corporate history.

Former CFO Scott Sullivan, ex-accounting chief Buford Yates, and former
company controller David Myers all agreed to settle the class-action law suit.
However, the Manhattan court would not reveal any financial details until a
hearing on Thursday 28 July.

A statement from New York state comptroller Alan Hevesi, who serves as lead
plaintiff in the case, said that Sullivan has placed his 10-bedroom lakefront
Florida mansion worth $10.9m (£6.2m) on the market to put towards the payouts.
Yates and Myers are said to be unable to afford to pay anything.

The liquidation and sale of Sullivan’s mansion is reported to represent
‘substantially all’ of his assets other than modest retirement assets, personal
effects and ‘virtually worthless business interests’, Hevesi added.

Earlier this month former WorldCom CEO, Bernie Ebbers, was sentenced to ‘at
least’ 25 years in federal prison for his part in the $11bn accounting fraud
that drove the company to bankruptcy.

Ebbers had previously agreed to hand over most of his personal wealth,
estimated at nearly $45m, to settle the class-action case, while a group of
investment banks that advised WorldCom previously settled for more than $6bn.

US District Judge Barbara Jones ignored Ebbers’ defence lawyers’ requests for
leniency, handing the 63-year-old a severe prison term. ‘This is not a minor
fraud,’ she told a packed Manhattan courtroom. US government prosecutors had
sought a maximum 85-year sentence.

Sullivan, Myers and Yates, who all pleaded guilty to participating in the
fraud at WorldCom, are set to be sentenced next month.

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