The agreement came just days after the first anniversary of the telecom giant’s disclosure of massive accounting irregularities, which rapidly pushed it into Chapter 11. Following an investigation by the SEC, WorldCom, now known as MCI, settled with the agency for $500m in May.
Under the amendment disclosed yesterday, WorldCom will also transfer $250m worth of common stock to a court appointed distribution agent. The SEC said this would allow victims of the fraud to share in the potential upside of owning WorldCom stock when it emerges from bankruptcy. The monetary penalty will also be distributed to victims.
WorldCom plans to re-emerge from Chapter 11 this fall. Its descent began in June 2002, when it made the first of a series of financial restatements that would eventually top $9bn. The company eventually made write-offs of $79.8bn.
The monetary settlement between the SEC and WorldCom follows their partial settlement last November. Under this deal, WorldCom neither admitted not denied wrongdoing. In the immediate wake of WorldCom’s collapse last year, the SEC had accused it of improprieties of unprecedented magnitude. Under last November’s settlement WorldCom also pledged not to violate securities laws in the future.
Source: Computerwire
