One of the important issues raised in the press in respect to the WorldCom Corporation was that U.S. Securities and Exchange Commission has formally charged WorldCom with fraud for accounting improprieties that made the company look like a money-maker when it was in fact losing billions. SEC claimed that WorldCom disguised its true operating performance by using undisclosed and improper accounting that materially overstated its income. WorldCom has done this through a scheme directed and approved by its senior management. The

In addition, the WorldCom suits allege that the company breached its fiduciary duty to the 401(k) participants and violated the provisions of ERISA by failing to provide accurate information about the company's financial condition, then allowing those employees to concentrate too much money in WorldCom stock.

The theory of Idealism prevents the organization from using its employees as the means for their success or profit. Should the charges filed be proven, WorldCom has indeed used their employees for gain; therefore, Idealism is not supported.

It was in the news on September 4, 2002 that government plans to add additional charges and possibly new defendants to its case against the officials behind WorldCom Inc.’s collapse. Sullivan and Myers and also Yates, who was the former director of general accounting, are accused of helping WorldCom hide billions in expenses to create the illusion of profitability. Several WorldCom executives not indicated but named in court papers by prosecutors as co-conspirators are on the verge of pleading guilty and are cooperating with the government’s investigation.

While the accounting methods used were illegal, it is not certain if the organization or its officers acted illegally or unethically. If it is determined that the officers know about the poor accounting practices, it could be argued that while these decisions do not support the Idealism ethical theory or the Natural Rights ethical theory, they could be spun to support ethical pragmatism. It could be rationalized that should the company go under far more individuals would be affected than if they fudged the numbers.

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