The accounting fraud at Worldcom was perpetrated by a number of high ranking executives, many of whom were in charge of accounting. At the forefront of the fraud was chief executive officer and founder Bernard Ebbers, in addition to allegedly instructing others to make the financial situation look better then it was, he also borrowed almost $400 million from the company to pay the margin call on his stock. Another key figure was Scott Sullivan, the company's chief financial officer, who spear headed the accounting manipulations. Sullivan also instructed key accounting staff, including the controller to follow along with his procedures.
By June of 2002, Worldcom could no longer cover up the massive manipulations to their financial reports, their unethical and improper accounting practices had left the world's second largest telecommunication company in ruins. The trading of Worldcom stock stopped trading in late June at an all time low. The news from the Worldcom scandal was so far reaching it set new post September 11th lows for the stock market. By July of the same year the company claimed for bankruptcy protection of more then $41 billion in debt. By the end of the whole scandal investigations uncovered in total an estimated $11 billion in fraud over five consecutive quarters, the fraud remains the largest in United States history, even bigger then Enron.1.
The final issue and the most important are the ethical issues involved with Worldcom committing accounting fraud. The scale that the fraud was committed was the largest in American history, and certainly had many consequences for many parties. First it is important to point out the stakeholders, the ones who were affected by the unethical decisions carried out by Worldcom. The stakeholders stretch far and wide and include the Worldcom investors, creditors, employees and their families, customers, the auditors, the stock market, other corporations especially in the telecommunications industry, and even the Worldcom executives responsible.
