Ex-WorldCom CEO sentenced to 25 years
Former WorldCom CEO was sentenced today to 25 years in prison for his felonies. He got off light: The maximum was 85 years.
Ex-WorldCom CEO sentenced to 25 years in prison ( CNN/Money)
Ex-WorldCom chief executive Bernard Ebbers was sentenced Wednesday to 25 years in prison. Ebbers was convicted in March of orchestrating an $11 billion accounting fraud at WorldCom, one of the country’s telecommunications companies. WorldCom’s bankruptcy filing in 2002 ranks as the largest in U.S. history. A federal jury in New York found Ebbers, 63, guilty of committing nine felonies. The crimes carry a maximum prison term of 85 years.
Considering that he cost a lot of folks their life savings, this punishment is about right.
Not to mention he was one of the catalysts for Sarbanes-Oxley. I am wasting more and more time on compliance with SOx than doing my job. Punish away.
I live in Mississippi, only about an hour away from the former MCI/WorldCom headquarters, so I’ve known a lot about the company since its beginnings as LDDS.
Ebbers has always come across as a pretty good guy, and has always been a very shrewd businessman. I think it probably came naturally to him to try and keep the company looking good even when it wasn’t particularly doing well financially. To that end, I don’t find it hard at all to believe that he instructed his financial officers to make things look as good as possible.
Scott Sulliven, the former CFO who became the key witness in Ebbers’s trial in exchange for sentencing leniency, was certainly more instrumental in the actual figure manipulation that took place.
In most corporations (and almost certainly this one), the CEO is fairly adept at reading and interpreting financial statements by necessity, but is seldom privy to the processes by which those statements are prepared. I seriously doubt Ebbers could have given particular instructions to Sullivan (or anyone else, for that matter) on how to go about making the numbers look good.
Add this to the fact that Sullivan enjoyed a life of opulence that included a 16,000 square foot mansion in Boca Raton, Florida (complete with a fur vault, eight master bedrooms with jacuzzis in each, and an 18-seat movie theatre), and the fact that although initially facing a maximum of 65 years, Sullivan likely will receive a 10-year (or shorter) sentence.
So in my opinion the feds put a figurehead away for 25 years while the sentence for the person who actually committed the wrongdoing will be essentially a slap-on-the-wrist.
Image really may be everything, after all.