back to Today's Commentary
Fraud Reaches $6.3 BILLION
-- August 8, 2002
WorldCom's fraudulent activities, according to reports, have been going on a lot longer than once thought -- even during flush times in the economy. As far back as 1999, when the bull market was still raging and the economy had yet to hit recession, the company allegedly propped up its profits to meet Wall Street's expectations.
To make up the difference between its forecast and real earnings, WorldCom allegedly "inflated its reserves for bad debt and drew on that account to fill in gaps." The result was a company that didn't disappoint Wall Street or its investors -- until, that is, its deception was revealed, knocking its share price to ZERO.
This goes to show how some companies, even in good times, will manipulate the system -- essentially STEALING money from investors.
WorldCom Fraud May Be $2.5 Billion Larger