This post is part of a feature in which he wonder whatever happened to some notorious financial felons. See all 17.
Bernard Ebbers, WorldCom's founder, built it into the world's largest telephone company, then drove it into the ground with his illegal dealings. He overstated WorldCom's cash flow by improperly booking $11 billion in company revenues. Shareholders first became aware of the problem when WorldCom announced it needed to restate its financial reports in March 2002.
As part of his shenanigans, Ebbers got $400 million in off-the-books loans from the company. Criminal fraud charges were filed against Ebbers and former Chief Financial Officer Scott Sullivan. Sullivan pleaded guilty to three criminal charges related to the fraud and cooperated with prosecutors in their case against Ebbers. Ebbers was sentenced to 25 years in prison. He is serving his time in the Oakdale, Louisiana, Federal Corrections institute.
Investor groups filed a class-action case against WorldCom's former directors, former executives, 18 banks, and its auditor, the infamous Arthur Anderson. A settlement was reached with some of these plaintiffs. Some former WorldCom directors paid a total of $50 million toward the settlement. Citigroup, which had promoted WorldCom's stocks and bonds as good investments even though it had concerns about WorldCom's rocky financial position, paid $2.65 billion.
We all should have taken this case as a warning that the banks and their directors were not to be trusted. This case turned out to be just a very small warning for the havoc the banks would soon create with the current credit crisis. This case clearly showed that the banks were more interested in making money on the sale of assets (no matter what they thought about the value of those assets) than they were about the interests of their customers and their shareholders. Unfortunately this greed has now not only taken down the world's largest telephone company. The greed of some U.S. investment and commercial banks has helped to take down the world's economy.
Lita Epstein has written more than 25 books including Reading Financial Reports for Dummies and Trading for Dummies.











Reader Comments (Page 1 of 2)
11-19-2008 @ 6:03PM
bpbk said...
Let's see - how does that differ significantly from the government - particularly the democrats, who lie, cheat, steal to protect their own interests.
The only difference between these corporate crooks and congress is the fact that congress is above the law.
11-19-2008 @ 6:09PM
Lita Epstein said...
BPBK,
I'm sure the shareholders and employees who lost their life savings because of his shenanigans don't agree with you.
Oh, by the way did Sen. Stevens of Alaska, the most recent Congressional felon, change to the Democratic Party? I think the reason the Democrats took over more Congressional seats in the last two Congressional elections is because of the financial mess the Republicans made of their leadership role in both the legislative and executive branches over the past 8 years.
Lita
11-19-2008 @ 6:59PM
dave said...
when is congress going to be investigated?!!!!!!!!!!!!!!!!!
11-20-2008 @ 3:30AM
Shawn M said...
Bernie the crook. Who could ever see it coming, the "workers"...? I had ALL my 401k in WCOM stock before I pulled it all out right before the WCOM crash by just a twist of fate. I was moving, quitting WCOM and everyone thought I was crazy, so did I with all the promises of WCOM going to $100 soon. I'll never forget Bernie visiting our department, walking thru the cubes, saying how great our dept. was and how it would never be eliminated. Now the company doesn't even exist. The inner workings and dealings at the top, I'm afraid, are so twisted that I fear where bottom really is in this "unwinding" process in our financial system and economy as a whole.
11-24-2008 @ 12:08PM
SJ said...
Do you know Bernie? Have you met him or worked side by side with him? Have you talked with him? Or do you simply trust the news channels for your information? I'd like to know how much personal time you spent on your opinions before publishing them as facts.
12-05-2008 @ 7:11AM
thomas mcalpine said...
no pardon, repay all he stole and all victims re-embursed with interest, all legal fees to be repaid
12-05-2008 @ 7:12AM
JS said...
Yes, SJ, I know Bernie. I worked with him. I watched him hijack one of the country's greatest business successes, MCI. I've heard the myth of the folksy Sunday school teacher. But I knew the reality... an abusive, arrogant blowhard who enjoyed pushing around elderly security guards and entry level employees. Bernie destroyed a lot of lives, and was the ultimate corporate bully. He got exactly what he deserves. Merry Christmas, Bernie!
12-05-2008 @ 7:12AM
Bill said...
Bernie Ebbers is now...and has always been a world class piece of shit.....he deserves exactly what he got....he shouldn't ever see the light of day again....OK...Mr. whiner....you ruined a lot of peoples lives with your illegal BS...now you should pay the price by staying behind bars for the rest of your lying and deceitful life.....You do the crime - YOU DO THE TIME !!
12-09-2008 @ 12:48AM
tdorsett7 said...
SCREW HIM!!!!!!!!!!!!!!
12-05-2008 @ 7:12AM
Chaz said...
Do the Crime,do the Time. Whiner!
12-05-2008 @ 7:13AM
Bill said...
Let his ASS rot in Prison. He is Just like the Big three Automakers Whining about a Bailout!!!!!!!!!!!!!!
12-05-2008 @ 7:13AM
Jim Borque said...
This guy ruined a lot of lives. He should do all of his time and not get out one day sooner. This idea that some people commit "White-collar" crime and then the rest are considered dangerous "felons" is a bunch of bull. What he did is worse than robbing a bank. He ruined people's entire lives and their entire savings. If Bush pardons him, I will lose what little respect I still have for him. Absurd to even think of it--moron that this guy is. I would like to see him with just one former employee that was robbed, go a few rounds in the Octagon.
12-05-2008 @ 7:14AM
TED said...
MARK TWAIN SAID STEAL 100.00 GO TO PRISON STEAL A MILLION GO TO CONGRESS... WELL THE NUMBERS ARE HIGHER BUT ITS THE SAME GAME.... BERNIE IS AN EXCEPTION THAT HE IS ONE OF THE FEW WHO IS CURRENTLY IN THE CAN.... HE COOKED THE BOOKS AND NOW HE DOES THE COOKING.... LETS HOPE THE SHALLOW BUSH FINDS SOMEONE SLIGHTLY MORE WORTHY OF A PARDON THAN BERNIE....
12-05-2008 @ 7:13AM
Hiroader2 said...
My ,My.., I mean the nerve, It's him and others like him, Scratching to get at their uncovered stashes,.. I 'd even suspect these type of folks to flee the country if pardon,.. With the economic state of the country.., We're interested to see which dogs Bush throws these bones to...
12-05-2008 @ 9:30AM
shirley weaver said...
when bernrd gives back all the money he took then maybe bush can think about a pardon.
12-06-2008 @ 6:10PM
bub said...
The face of greed
12-05-2008 @ 12:14PM
Andy said...
I hope W leaves him to rot...The worst pardon ever was Clinton letting Marc Rich out.
12-05-2008 @ 11:26AM
Cathy said...
Personally, I think he should pardon him. He ain't done nothing that all them "GOOD OLE BOYS" in our government ain't done. They just cover it by lining pockets. What good is it gona do the taxpayers to let him sit in jail. He is just costing those that have already lost money to him, MORE MONEY. We get up and go to work each day... Pay our taxes to the "GOOD OLE BOYS", and the amount we pay, .....there's still a percentage going to Bernie & everyone like him!!!! Besides, he's gona have to answer to it all AGAIN, SOONER OR LATER, & while he's figuring out his answer, you gona be standing there beside him trying to explain why you decided to break a "commandment", by passing judgement on him. So you just as guilty as he is in "Gods" eyes!!! Explain that one.!!!!!!
12-05-2008 @ 11:49AM
bernie said...
No, I don't know Ebbers, but I do know he cooked the books while taking out millions.......I'd call him a professional thief that went to church on sunday.
12-05-2008 @ 11:52AM
bernie said...
Cathy, I'll try to explain......some people are con- artist that can control people, some are good people like Billy Grahm the preacher, then you have hitler, then Mother Theresa. It seems that taxpayers dollars draws the flies, and in Ebbers case it's the investment dollar. They'll say anything to get you to heaven, or anything to get your dollar. and Bernie Ebbers you can go to hell, with Mother Theresa holding the prayer meeting.