WorldCom Incident

How One Woman's Action Brought Down an Empire

What Happenend?

In 2002, WorldCom had be under heavy financial pressure after stock declines and a failed merger with Sprint, and had suffered even worse after Cofounder Bernard Ebbers had asked for corporate loans that accumulated to $400 million with the idea of covering margin calls. However, this strategy ultimately failed and he was fired in April of 2002. Thus the company turned to shady accountant deals that showed the company would make profitable growth to increase the price of WorldCom stock


In 2002, Cooper, the current Vice President of Internal Audit, was checking the finances of WorldCom over the past few months and noticed something fishy about the math. She and her team of auditors worked together at WorldCom, often at night to remain hidden, to investigate and unearth $3.8 billion in fraud in questionable accounting entries that inflated WorldCom’s earnings and portrayed the company making more money then it actually did (as told previously). WorldCom was officially busted

WhistleBlower

Who is She?

Cynthia Cooper, a native of Clinton, Mississippi who had previously worked for the Atlanta offices of Public Accounting firms PricewaterhouseCoopers and Deloitte and Touche before working at WorldCom, had earned her Bachelor of Science in Accounting at Mississippi State University and a Master of Science in Accountancy from the University of Alabama, and is a Certified Public Accountant, a Certified Information Systems Auditor, and a Certified Fraud Examiner. Shortly after Cooper applied to WorldCom she was given the position of Vice President of Internal Auditor

Victim

The Company

WorldCom is a long distance telophone company that had more or less monopolized the communications industry in 2002
<-- tee hee

The Non-sugar Coated Result

WorldCom disclosed a $3.8 billion accounting fraud and filed for bankruptcy protection, in turn wiping out its shareholders. The CFO, Sullivan, pleaded guilty to several crimes and testified on behalf of the government against WorldCom CEO Bernie Ebbers, who was convicted and sentenced to twenty-five years in prison. Sullivan was only sentenced five years

The Spoils Went to...

Cynthia Cooper went on to write her book of the account in the story called, “Extraordinary Circumstances, The Journey of a Corporate Whistleblower”, and was nominated person of the year in 2002 for her role in unraveling the accounting fraud. Since leaving MCI, she has started her own consulting firm and now gives lectures and her time in informing students and adults of what happened

The Public's Response

The public demanded action, and the Sarbanes-Oxley Act – the most sweeping investor-protection legislation passed by Congress since the great depression – was passed.


This legislation marked the transition to more regulation in business and ensured the corporate sector work more honestly more frequently to eradicate corporate greed and misdemeanor. Achieved through required financial checks of big stock holding companies

The Best Opinion

Personally, I was shocked at how easily WorldCom cheated the financial system. To think billions of dollars were made by just stretching the truth is beyond belief. Overall I believe Copper did the right thing by questioning her superiors, for she might have been caught up in the downfall if she had never done her job and dug deeper for the truth. Good for her, she deserves the success

Works Cited

Farrell, Greg, and USA TODAY. "WorldCom's whistle-blower tells her story - USATODAY.com." USA TODAY: Latest World and US News - USATODAY.com. N.p., n.d. Web. 12 Feb. 2013. http://usatoday30.usatoday.com/money/companies/regulation/2008-02-14-cynthia-cooper-whistleblower_N.htm.


"WorldCom Scandal: A Look Back at One of the Biggest Corporate Scandals in U.S. History - Yahoo! Voices - voices.yahoo.com." Yahoo! Voices - voices.yahoo.com. N.p., n.d. Web. 18 Feb. 2013. <http://voices.yahoo.com/worldcom-scandal-look-back-one-biggest-225686.html?cat=3>.