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Ex-CFO of Worldcom Pleads Not Guilty

Scott Sullivan's attorney says his client is not responsible for the loss of the firm's stock value.

September 18, 2003|From Associated Press

OKLAHOMA CITY — Worldcom Inc.'s former chief financial officer pleaded not guilty Wednesday to charges he violated Oklahoma securities laws in an $11-billion accounting scandal that led to the biggest bankruptcy in U.S. history.

Scott Sullivan was booked earlier in the day and then released after posting $50,000 bail. He was fingerprinted and photographed as part of the booking process.

The company and five other former executives, including former Chief Executive Bernie Ebbers, also are charged with defrauding Oklahoma investors by understating expenses by $11 billion to inflate reported profits.

Sullivan and four of the former executives also have been charged in federal court, but the Oklahoma charges are the first brought against the company and Ebbers.

"We intend to prove that Mr. Sullivan responsibly reported accounting figures as a CFO of WorldCom and was not responsible for the company's difficulties and the loss of WorldCom stock value," Roy Black, Sullivan's attorney, said after his client entered his plea before Oklahoma County District Judge Russell Hall.

Each of the six defendants charged by Oklahoma are accused of 15 felony counts, each carrying up to a 10-year prison sentence and a $10,000 fine.

Ebbers pleaded not guilty to the charges Sept. 3 and was released on $50,000 bail.

The charges, brought by Oklahoma Atty. Gen. Drew Edmondson, allege that WorldCom's falsified profit reports led Oklahoma investors to lose millions, including a $64-million hit to state pension funds invested in the company.

Oklahoma's effort to prosecute the company and executives has vexed federal agencies, which worry that the state's case could undermine their efforts to bring federal charges in the scandal.

The state's case also charged former executives David Myers, Buford Yates Jr., Betty Vinson and Troy Normand, who have pleaded guilty to federal charges and are helping federal prosecutors.

No dates have been set for their initial court appearances in Oklahoma.

Despite the prosecutions and investigations, Worldcom is preparing to clear its financial name in U.S. Bankruptcy Court, where the company's financial reorganization plan is nearing approval.

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