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What Happened When Alex Kenjeev Paid His Student Loan in Cash
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.
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Reader Comments (Page 2 of 2)
12-05-2008 @ 2:29PM
Mac said...
Cathy,,,,I'm sorry to say this but your post makes no sense. Why not let all convicted men and women out of prison, and let them answer to their higher power?
12-05-2008 @ 4:23PM
bernie said...
Anybody know what Hotel like prison Bernie is in?
12-05-2008 @ 2:29PM
TM said...
Bernie deserves to rot his ass in prison for the entire time.
What a scamming piece of Sh**
Thanks to Mr. Ebbers I lost my job and my retirement after 20 years with MCI/Worldcom...
Gee, I am sure he is real worried about the lives of all the employees that lost everything because of him. He probably thinks about it at the same time he thinks about the millions that he has waiting for him when he gets out. I can only hope that somebody made him their "bitch" while in prison!
12-05-2008 @ 2:31PM
BEV said...
HEY BUSH, IF YOU PARDON THIS MAN, YOU SHOULD PARDON ANYONE WHO HAS EVER COMMITTED A CLASS C AND D FELONY. THEY ARE MORE DESERVING THAN HE IS AND ALL YOUR CRONIES WHO HAVE STOLEN FROM THE AMERICAN PEOPLE.
12-05-2008 @ 2:31PM
Ben said...
not only should he stay in jail;but he and all these crooked politicians should be prosecuted under the RICO Act and lose everything they have stolen from investors and the public . leave them and their families broke ,penniless & disgraced.
12-05-2008 @ 2:31PM
MIKE said...
IF THIS GUY WAS A DRUG DEALER, HE BE OUT!
12-05-2008 @ 2:31PM
Huber said...
When this greedy scum bag re-pays the entire amount of 11 Billion + back to the investors and govt. -- otherwise -- let him rot in prison !
12-05-2008 @ 2:28PM
Ralph Shoup said...
My stock broker recommened world com because their books showed the company was solvent and a good investment at $38.00 a share. This goon ruined me and other investors lives and should stay in prison for the maximum time. I pray that Bush does not pardon him and let him think of all the money he has waiting for him out side of prison that he can never spend at our expense.
12-05-2008 @ 2:32PM
Geri said...
aahh, "poor" baby!!! waa waa waa, who cares? Nobody...
12-05-2008 @ 2:33PM
Sharon said...
What the hell is this parden crap all about anyway! Since when should WE LET an outgoin president have authority to let these criminals out of jail JUST because he is leaving office? This goverment has MANY, MANY things in it that WE as americans need to stand up and SAY WE HAVE HAD ENOUGH!! This is one of them and the CEO'S need to get off their MULTI MILLION $$$$ "FOR WHAT" bonuses! Just what do they do that people think they deserve these outragous amounts of money? What is it - someone please TELL ME! WTF!!!!!!! ENOUGH!!!!!!!! I am SICK TO DEATH of this CRAP!!!!!!! My god - I am so blown away by some of this stuff..............................!
12-19-2008 @ 6:50AM
InfoGuy said...
For the question on what hotel-like prison Bernie is in?
Answer: He's doing his time chillin' at a minumum security prison...
The Federal Correctional Institution (FCI) in Oakdale, LA, houses low security male inmates.
http://www.bop.gov/iloc2/InmateFinderServlet?Transaction=IDSearch&needingMoreList=false&IDType=IRN&IDNumber=56022-054&x=0&y=0
12-21-2008 @ 5:11PM
Harry said...
What if Scott Sullivan lied to save his own neck. We don't trust our gov't or the media.We've caught them both lying to us many times in the past. So how then can we judge Bernie. Only Bernie and God know the TRUTH. Maybe some day we will be able hear what really happened at Worldcom. Until then no venom please !