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WorldCom Pleads Not Guilty

The company contests Oklahoma's criminal charges, saying they only hurt innocent workers.

September 12, 2003|From Bloomberg News

WorldCom Inc., which filed for bankruptcy protection after overstating results by $11 billion, on Thursday pleaded not guilty to criminal charges that it defrauded investors in Oklahoma of at least $64 million.

WorldCom and ex-Chief Executive Bernard J. Ebbers and five other former officials last month were charged with securities fraud in the state for allegedly falsifying the company's accounts to inflate its stock price. Ebbers pleaded not guilty last week.

The charges against WorldCom, the second-biggest U.S. long-distance telephone company, come as it tries to repair its image and emerge, under the name MCI, from the biggest bankruptcy filing in U.S. history. They are the first criminal charges against Ebbers and WorldCom stemming from the alleged accounting fraud.

"This action against MCI as a company only hurts innocent employees who have already suffered greatly," Carol Petren, deputy general counsel for the company, said in a statement. "We understand the desire to see justice done, and the former executives accused of committing fraud are rightly being investigated as individuals."

Former Chief Financial Officer Scott D. Sullivan is scheduled to appear in court in Oklahoma on Wednesday. He and four other former executives accused in Oklahoma also have been charged by U.S. Atty. James Comey in New York.

WorldCom's former accounting chief Buford Yates Jr., ex-Controller David Myers and former accounting executives Troy Normand and Betty Vinson have all pleaded guilty to the federal charges in New York and are cooperating in Comey's probe of Ebbers.

The U.S. attorney's office in Manhattan has been trying to develop evidence showing that Ebbers knew his subordinates were engaging in securities fraud. Ebbers hasn't been charged with a crime by federal prosecutors.

Elsewhere Thursday, a Bankruptcy Court in New York resumed hearings on the company's reorganization plan.

Lawyers for WorldCom reported progress in ironing out the details of a last-minute settlement with some of the few major creditors who hadn't approved the plan, which would repay only about $5 billion of the $41 billion WorldCom owed before it entered Chapter 11.

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