WorldCom finance chief tells of Ebbers pressure

[emad]

David Teather in New York
Wednesday February 9, 2005
The Guardian

The former finance chief of WorldCom yesterday testified that the company's ex-chief executive Bernard Ebbers had repeatedly put pressure on him to meet Wall Street expectations, even as the firm's finances were crumbling.

In his second day of testimony, Scott Sullivan told the court in lower Manhattan of an instance in the third quarter of 2000 as the market began to fall away. Mr Sullivan said he had told Mr Ebbers the only way to meet Wall Street estimates was to book improper accounting entries to increase revenues and obscure costs.

"He looked at the information, and he didn't say a lot," Mr Sullivan said. "He looked up and said: 'We have to hit our numbers."

The former finance chief said he took that as the green light to make the false entries. He claims the firm kept two sets of books, one reflecting the true financial position of the company, the second for Wall Street. "The source of the pressure was Bernie," he testified.

http://www.guardian.co.uk/business/story/0,3604,1408607,00.html

[cthrumatrix]

1. mafia prison terms are in order for Ebbers and Lay.... they stole

and looted the savings of many

[On the Road]

2. Oh, Ebbers is Directly Implicated!

That was stupid. I figured it happened because the CEO told the CFO "we have to hit our numbers." But if Ebbers had a sense of self-preservation, he would have at least put a fig leaf on it by saying: "Of course, we can't break any laws (wink, wink)."

MCI was a customer of mine at one point. I had an office in their building two days a week. That is one frighteningly aggesive company. I respect what they were able to accomplish, but boy did they deserve this.