Do Big Companies Take So Much From Each Other - 1328 Words

do big companies take so much from each other? MCI, Inc. was an American telecommunication corporation, a subsidiary of Verizon Communications. In the article World-Class Scandal At WorldCom by David Hancock he discusses how â€Å"The corporation was formed as a result of the fusion of WorldCom and MCI Communications corporations, and used the name MCI WorldCom for a while and was succeeded by the WorldCom Company, before changing its name on April 12, 2003, as part of the corporation s ending of their bankruptcy status.† WorldCom Inc. began as a small Mississippi telephone service provider of long distance telephones. They are not the only telecommunications firm in financial trouble, there are many others who have financial troubles also.†¦show more content†¦From all of this their revenues fell short of expectations and response in Washington was crazy. On June 26th, the U.S. Securities and Exchange Commission charged the company with huge accounting fraud and fleetly obtained the court order excepting the co mpany from controlling its payments to past and current executives. The thing that happened was the company inflated assets by as much as $11 billion, leading to thousands of lost jobs and $180 billion in losses for investors. The main player CEO Bernie Ebbers, he did not report line costs by utilizing rather than expensing and had false accounting entries to the company. Eventually he got caught and their auditing department uncovered $3.8 billion in fraud. They were faced penalties from all of this and the CFO was laid off, controller resigned, and the company filed for bankruptcy. Ebbers was sentenced to 25 years of fraud, from his horrible mistakes. According to (accounting-degree.org) â€Å"Towards the end of 2003, it was estimated that the company s total assets had been inflated by about $11 billion. This caused them to be the largest accounting fraud in history. Line costs are what they pay other companies for using their communications networks; they consist mainly of access fees and move charges for messages for WorldCom consumers.† Beginning modestly during the mid 90s and on at an accelerated pace through 2002, the company directed by Ebbers used