BusinessCompany NewsWorldCom execs told of problems in March

WorldCom execs told of problems in March

Both the former chief executive and former finance director of bankrupt telecoms company WorldCom were warned about potential problems in the companies accounts, four months before it collapsed.

Link: Read our WorldCom special report

Bernard Ebbers, and Scott Sullivan – currently facing fraud charges – received an email on 18 March that raised concerns about accounting issues related to the preparation of WorldCom’s annual report, the US House Financial Services Committee said.

The warning was based on an earlier email sent by a telecoms analyst from stockbrokers Salomon Smith and Barney that said WorldCom was to be dropped from a list of recommended shares, according to a statement made by the House Financial Services Committee.

Four months later, on 22 July, WorldCom filed for Chapter 11 bankruptcy protection, after it admitted to $3.9bn error in the preparation of its accounts.

Sullivan, who has been released on $10m bail, stands accused of being the mastermind behind the alleged conspiracy to hide WorldCom’s expenses.

Last week, he was indicted by a grand jury. He faces up to 65 years in prison if he is convicted on charges of securities fraud, conspiracy and filing false statements with the SEC.

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