85 years in jail for ex-WorldCom CEO
It’s tough at the top for some. Bernie Ebbers, the
former CEO of telecommunications giant WorldCom, was found guilty today for his
part in the $11bn accounting scandal that forced the company into bankruptcy.
It was the largest financial collapse in US corporate history. Mr. Ebbers,
63, failed to convince the jury he knew nothing of the financial side of
WorldCom’s operations and was thus convicted for fraud, conspiracy and
falsifying documents. He could face up to 85 years in prison. He accused his
CFO Scott Sullivan of cooking the books, telling the court he had been kept in
the dark about WorldCom’s accounts. US Attorney General Alberto Gonzales said
the decision was an important one as it showed fraud was found to extend “from
the middle management levels of this company all the way to its top executive.”
Ebbers is protesting his innocence and has been released on bail until the
final sentencing on June 13th, during which time his lawyers will be appealing
the verdict.
Ebbers started his career as a milkman, basketball
coach and nightclub bouncer, before investing in a small telecom company called
Long Distance Discount Service (LDDS). In 1985 the company changed its name to
WorldCom and grew to become the second largest provider of long distance
telephone calls in the USA.
The dot-com bubble helped WorldCom and Ebbers become high profile corporate
players. In 1998 the company’s stock hit a record $64 per share high.
Unfortunately for Ebbers, the technology bubble burst and at the same time the
energy giant Enron collapsed, also due to fraudulent mismanagement. This
brought the Securities and Exchange Commission to his doorstep. They began
examining WorldCom's accounts and a $400m personal loan to Ebbers himself. From
then on Ebbers was on the slippery slope to ruin and was no longer a Wall
Street darling.
OPINIONS: Discuss whether you agree or disagree with the
following opinions:
- 85 years is too short – 20,000 people lost their jobs and livelihoods.
- It’s great to see the guys at the top being sent to prison for a long time.
- What he did is normal in many companies. Why single him out for punishment?
- It is very possible he wasn’t aware of the complicated accounting techniques. The jury has made a mistake.
- His rags-to-riches story is an inspiration to us all. He should not be punished so severely.
- The bigger they are, the harder they fall.
- Justice is justice.
- Why give such a huge sentence because money is involved? Murderers and rapists can get away with five years in prison. Something is wrong here.
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