Oh MAN!!!! First Enron, now Worldcom (1 Viewer)

[CharlesD]

And how many more companies have been inflating their stock price with similar 'irregularities'? Why is no one inside these coprporations taking any responsibility? Where are the regulators? Is the entire system corrupt?

These CEOs, CFOs (Lay, Ebbers etc) need to do some time behind bars IMO. This is massive fraud perpetrated out of greed. A slap on the wrist and retirement with a couple 100 million or more is not aceptable. These greedy bastards are doing as much damage to this country as any terrorist IMO.

I always thought WorldCom was crooked, they were more interested in aquisitions and their stock price than actually providing good/new services. When they tried to take over Sprint I heard that they (WorldCom/MCI) had terrible customer service ratings in a business not known for good customer service. I was relieved that the Sprint deal was squashed as it would have had a negative impact on the local economy (and Sprint's own troubles have had a bad enough impact as it is)

 

[Peter Kim]

As a former internal auditor, I'm sure you can appreciate the importance of strict factual accuracy.

With the emphasis on 'former', I can still 'appreciate', yet no longer need to go to all ends to exercise. Especially here on HTF, since I'll always know that I'll have relentless and exacting admins like you, Michael.

 

[Mark Schermerhorn]

It's going to take years for Wall Street to recover it's reputation, which in my opinion wasn't that high to begin with. And this is only the tip of the iceburg, I'm sure. This doesn't spell good news for our economy.
At some point, the corporations decided that their product was the stock sheet, and not what they actually sell. That is absolute madness, and now we're going to pay the price.
My 401k is now 100% in bonds, and I don't see that changing for a few years at least. Nasty stuff.

 

[MickeS]

Actually, there are several CEO's who have been in the spotlight recently for taking huge loans, and some of them haven't even had to pay back the loans.

/Mike

 

[Stevan Lay]

Althought this headliner is a major setback to the overall needed recovery of the US economy and subsequently the equities market, I doubt that this is the capitulation that many investors and traders would like to see, which usually summons a bottom of the down cycle where fear, hopelessness, and lack of confidence comes to a head.
I have been a Bear since September 2000 and I do not mean to project any pessimism nor doom and gloom but my intuition that I get is that we have further downside risk to come :frowning: I do hope that I'm wrong so we can see the end of this absurdity.

 

[MichaelG]

This makes you wonder how many other big companies are doing the same illegal practices. Was Anderson Consulting involved in this one too? I thought I heard that on the news. This is not a statement but only a question. If you know who was the auditor/accountant for WorldCom please post.

Everyone that has a job right now be thankful, you could be next.

 

[MickeS]

/Mike

 

[Lee Scoggins]

As someone who works with senior management on strategy issues, I am saddened to learn of yet another scandal.

By and large, corporate America is decent, hardworking and full of integrity. But clearly the ethics of several major copmanies and their Boards of Directors was missing. The great thing about our capital markets is that punishment is delivered swiftly and recovery will occur.

This could represent a real, and well-earned, blow to Wall Street. There could rightly be a generation of investors that goes away and invests in real estate (buy a house!). They sowed these troubles by loading these firms up with debt in chasing i-banking fees, even when the business model was clearly a house of cards. Jack Grubman of Salomon Smith Barney contributed to this as well.

Bottom line: I don't feel sad for these Hampton-living greedy bankers. I feel extremely sad for the 17,000 that will be affected by this latest scandal. My thoughts and prayers go out to them...

 

[Moe Maishlish]

This makes you wonder how many other big companies are doing the same illegal practices.

Unfortunately, that's exactly what most people are thinking. Trust is lost in companies that have not fouled, based on the wrongdoings of the Enrons & WorldComs, and everyone suffers. Look at the market - pretty much everyone is down!

No good can come of this. One or two bad Apples are certainly spoiling the whole bunch.

As for the CEO's who run away with millions - grab 'em, throw in in jail, and disperse their life savings to all the people who have lost the jobs, and those who have lost their life savings as a result of corporate greed.

Moe.

 

[MickeS]

I hope that's what happenes, but all too often it seems that the ones that suffer are the workers getting laid off, while the people responsible walk away with millions. How many Enron executives have been punished yet (not a rhetorical question, I honestly don't know)?

/Mike

 

[Ryan Wright]

grab 'em, throw in in jail, and disperse their life savings to all the people who have lost the jobs, and those who have lost their life savings as a result of corporate greed.

I was about to post the same thing. Take every last penny away from them and distribute it to the people they screwed. This whole "quietly going away with a hundred million bucks" thing has got to stop. I, for one, am sick of it.

 

[Ross Williams]

By and large, corporate America is decent, hardworking and full of integrity.

Thanks I needed that after reading about this.
This is a seriously f'd up world we live in. People that hurt nobody but themselves (drug users) spend their lives in jail. While those that rob hundreds of millions of dollars, destroying thousands of families lives, get to retire to their mansions in Miami.

 

[Todd Hochard]

I, for one, am not so sure that the markets will recover quickly. While the Worldcoms and Enrons are the big news makers, what of companies like Lucent, whose former CEO (Rich McGinn) and CFO (Carly Fiorina- now in the process of, IMO, destroying HP-Compaq) did essentially the same thing, but more under the rug. Today, Lucent trades several times below it's Oct 96 IPO price.
As I work in tech, I am naturally more heavily invested in tech (buy what you know), and have (and continue to) suffered substantial losses as of late (even in non-tech, except Starbucks, WOOHOO! ). Even from the inside, so to speak, it seems to be near-impossible to see these blind-sides beforehand.
I think this is just one more (with more to come) instance of investor confidence being shaken to the very core, and may greatly push off any sort of real recovery. To me, this is quite troubling.
The fact, that, essentially, no one is held accountable for these actions is most concerning. Lay moves on to a nice seven-eight figure retirement, Andrew Fastow the same, Carly was "rewarded" with another company, etc. These people have shown a distinct lack of integrity with the life savings of millions of people, who invested in their lies, and yet, they are unscathed. Truly depressing, IMO.
Todd

 

[Philip Hamm]

Don't mean to derail this thread, but this is just too flawed to leave be.

People that hurt nobody but themselves (drug users) spend their lives in jail.

So nobody is hurt in the whole supply chain that gets the drugs to them huh? No cops or Coast Guard agents die, no poor farmers are explioted either I guess. It is a strange world indeed.

 

[MickeS]

Philip, not by the drug use itself. Punish the distributors and the manufacturers all you want, but the mere USE of a drug harms nobody else. If it was all legal, we wouldn't see the negative effects you're talking about.

/Mike

 

[Patrick Sun]

Okay, let's lay off the drug abuser angle and go back to figuring out how to draw-n-quarter these execs getting rich off the fleecing of corporations and stockholders by inflating P/L statement. Thanks.

 

[Patrick_S]

WorldCom Inc. teetered on the edge of bankruptcy on Wednesday after its $3.8 billion accounting scandal

Ok who misplaced that decimal point?

What a tragedy that 17k will be out of work by Friday will those responsible have probably made millions and don't need to work ever again.

 

[Trace Downing]

There are 80,000 people working for Worldcom. The 17,000 that are supposed to be laid off has now jumped to 25%. When NASDAQ shut down trading after WC stock hit below 8 cents, this company is going under. I really feel for the employees of WC, but not for MCI itself.
I don't know much about Worldcom, but I do know MCI. I can't help but think about them with a wry sense of..."Be careful what you wish for, you just might get it." It was MCI that pushed for the initial breakup of the Bell System in 1984. They were the biggest cheerleaders of the 1996 telecom bill that de-regulated the industry (although my company also pushed hard as well). They drove down Long Distance rates to the point where profitability is now in question. After the failure of the telecom act, and lousy customer satisfaction, and hidden fees most consumers want the Bell System back together. Ironically, we are paying MUCH more for basic phone service than we ever did under Ma Bell. Strange that they would be one of the first casualties of what they created in the first place.HMMM!

 

[Ross Williams]

Sorry to start the derailment of this thread, glad to see it's back on track. But this just pisses me off. The rich usually get away with everything, while the poor continue to get screwed on a daily basis.

This is a perfect example of that. You just know those that did this will get away with a slap on the wrist, their politician buddies will make sure of it. The employees will suffer the consequenses for them, by losing their jobs, their homes, their way of living, etc, etc.

 

[Philip Hamm]

Trace,

Indeed it's very interesting. Historically busting monopolies has been good for the customers. I think in another 10 years after the dust settles the telecom industry may be better off. But who knows? The whole debacle is very strange.