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February 18, 2005

WorldCom CFO Admits to “Cooking the Books”

Last week, former WorldCom CFO, Scott Sullivan, testified that his goals to meet Wall Street projections clouded his obligation to follow the law. Sullivan cooked the books by making adjustments that were not necessary in order to meet these high expectations.  Sullivan testified that he cooked WorldCom’s books because WorldCom former chief, Bernard Ebbers, instructed him to meet Wall Street’s earnings and revenue targets.

Sullivan is the only witness to connect Bernard Ebbers to the large fraud scandal at WorldCom.  Sullivan testified that he knew it was wrong to go against the law but that he thought he would make it through without problems.  The primary issue in this case is whether a jury believes that either Sullivan or Ebbers was the ringleader in WorldCom’s large accounting fraud.

The accounting fraud that has caused WorldCom to go into bankruptcy is estimated to be a record $11 billion.  On cross-examination, Sullivan testified that every time these adjustments occurred, only Ebbers and himself were present.  Some critics believe that Sullivan took marching orders to make adjustments from Ebbers, to run and commit fraud on his own free will. 

Posted by Nicole Robbins at 02:28 PM in Contracts | Permalink

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