Wall Street referred to him as the 'telecom cowboy'. Worldcom CEO Bernard Ebbers became very wealthy from the rising price of his holdings in the company's stock.
By 2000, WorldCom's stock declined and Ebbers came under increasing pressure from banks to cover margin calls on his WorldCom stock that was used to finance his other businesses (timber and yachting, among others).
Ebbers persuaded WorldCom's board of directors to provide him corporate loans and guarantees in excess of $400 million to cover his margin calls.
Ebbers was finally ousted as CEO in April 2002 and replaced by John Sidgmore, former CEO of UUNet Technologies, Inc.
Beginning in 1999 and continuing through May 2002, the company (under the direction of Scott Sullivan (CFO), David Myers (Controller) and Buford 'Buddy' Yates (Director of General Accounting) used fraudulent accounting methods to mask its declining earnings by painting a false picture of financial growth and profitability to prop up the price of WorldCom's stock.
On March 15, 2005 Bernard Ebbers was found guilty and convicted of fraud, conspiracy and filing false documents with regulators - all related to the $11 billion accounting scandal at the telecommunications company he founded. He was sentenced to 25 years in prison.
The others, including , Sullivan were also found guilty of fraud and were served sentences.
Image: Former WorldCom Inc. CEO Bernard Ebbers arrives at Federal court in New York on March 15, 2005. | Photograph: Stan Honda/AFP/Getty Images
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