Tuesday, March 15, 2005
A federal jury found Bernard Ebbers guilty of all nine counts in the indictment brought against him. The verdict was handed down by a New York jury after 8 days of deliberation on the former WorldCom CEO and mastermind behind the accounting scandal that brought down the telcom giant.
AP writer Erin McClam reports, “Ebbers’ face reddened.”, as the verdict was read. Sentencing is set for June 13 when he will face up to 85 years in prison.
Ebbers testified in his own defence, saying he left the details of the company’s accounting to others and that he had no knowledge of shady practices. But Scott Sullivan, ex-chief financial officer and key prosecution witness, directly linked Ebbers to the fraud. He had agreed to co-operate with prosecutors in the hopes of receiving a lenient sentence for his own involvement in the fraud.
The demise of WordCom sparked a massive class action law suit by investors. The drastic plunge of WorldCom’s stock value cost upwards to $11 billion as the scandal unravelled. Secuities fraud case filings stemming from the suits will probably break new legal ground whereby the actions of investment banks and public accounting firms will be called into legal question.