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Old 26-06-02, 02:38 PM   #1
greedy_lars
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Default another one bites the dust

Scandalized WorldCom Near Collapse
Wed Jun 26, 1:29 PM ET
By JOHN PORRETTO, AP Business Writer

JACKSON, Miss. (AP) - WorldCom Inc. spiraled toward the brink of bankruptcy after the communications giant reported it had disguised $3.8 billion in expenses. The news dragged down the stock markets Wednesday, and President Bush ( news - web sites) said the federal government would investigate.

It is one of the largest in a series of accounting scandals that have shaken faith in corporate America.

WorldCom, which owns the nation's No. 2 long-distance carrier MCI, said late Tuesday that more than $3 billion of expenses in 2001 and $797 million in the first quarter of 2002 were wrongly listed on company books as capital expenses, thus not reflected in its earnings results.

That means the company may have actually lost millions of dollars when it reported profits. The Clinton, Miss.-based company said it will restate earnings for all of 2001 and the first quarter of 2002.

Its auditor during that period was Arthur Andersen. The Chicago-based accounting firm, once one of the world's largest, was convicted of obstruction of justice earlier this month for its handling of documents related to now-bankrupt Enron Corp. It has lost many of its clients since the Enron accounting scandal broke late last year.

WorldCom also announced that chief financial officer Scott Sullivan has been fired, and said it would lay off 17,000 workers beginning Friday.

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good ole Arthur Andersen, aint they just something else? well no biggie, they are gonna lay off just `17,000 workers, so as to recoop bucks. the recessions over. yea right...
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Old 26-06-02, 05:44 PM   #2
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glad i'm self employed

thought this was a backward track...lol

"another one bites the dust" backwards = "it's fun to smoke marijuana" ....no shit, try it....
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Old 26-06-02, 08:34 PM   #3
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"and another one gone, and another one gone, another one bites the dust"

Martha, you can't have it both ways


By ROBERT TRIGAUX, Times Business Columnist
published June 26, 2002


--------------------------------------------------------------------------------

I'm confused.

Should I ask Martha Stewart for her yummy summer recipe for Asian salad over soba noodles? Or the latest insider stock tip to fatten my wallet?

There's the rub. Martha Stewart wants to be known as America's queen of white-bread domesticity. But she also happens to be the chief executive of a good-size corporation, a multimillionaire and capitalist icon, and a consummate socialite on the A-list of the nation's business elite.

It is ultimately that dual personality that got her in deep trouble with federal investigators for possible insider trading of ImClone Systems stock. If true, that's a possible felony, a big legal problem for Martha and a serious blot on the Martha Stewart brand.

Suddenly, the bankruptcy of Kmart, which sells most of Martha Stewart's products, no longer tops Martha's list of worries. With ImClone, Martha's landed in water hot enough to boil potpourri.

That much became crystal clear Tuesday morning when CBS TV host Jane Clayson introduced Stewart's weekly home tips segment on the Early Show with a summary of events surrounding Stewart's sale of ImClone stock. Stewart agreed to discuss the stock sale in order to appear on the show.

Standing with Stewart in a kitchen studio complete with bowls of carrots and peanuts, Clayson asked Stewart about the ImClone investigation and the recent suspension of her broker (who advised selling the ImClone shares) at Merrill Lynch. Stewart, who chopped cabbage between questions, said she couldn't comment because the inquiry is continuing.

Congressional investigators and federal prosecutors want to know if Stewart had inside information when she sold nearly 4,000 shares of the biotech company in December -- one day before the Food and Drug Administration said it had rejected ImClone's experimental drug for combating colorectal cancer. ImClone's stock tanked on the FDA news.

Stewart, 60, was asked if actions by her stockbroker might complicate her situation. "I think this will all be resolved in the very near future and I will be exonerated of any ridiculousness," she told CBS viewers. "I want to focus on my salad, because that's why we're here."

Asked again what effect the stock sale has had, Stewart replied: "When I was a model -- and I was all during high school and college -- you always wanted to be on the cover of a magazine ... Well, I am the CEO of a New York Stock Exchange-listed company and I don't want to be on any covers of any newspapers for a long, long time. That's the story. Thank you very much."

Martha. Martha. Martha. This investigation of your selling shares in ImClone just before the stock nosedived seems so unsavory. So messy. So un-Martha.

Can we trust your tips on making the perfect piecrust if we must wonder whether you're getting richer from stock tips (unavailable to other investors) from a rich CEO pal?

Should we care (as you seem to think we must) that you have four chow chow dogs named Zu-zu, Paw-Paw, Chin Chin and Empress Wu, plus seven Himalayan cats called Teeny, Weeny, Mozart, Vivaldi, Verdi, Berlioz and Bartok, if you might be heading toward a felony charge for insider trading?

For Martha, none of the rules about insider trading should be foreign territory. While in her late 20s, after a few years as a housewife and mother, Martha became a Wall Street stockbroker. It was there that she honed many of her competitive sales skills that have helped her in recent years as a CEO and self-marketing genius.

At the least, the squeaky clean Martha Stewart name is now stuck in the muck. Late-night TV comedians are enjoying Martha's predicament.

What a hot crowd. Man, you sound like you just got a stock tip from Martha Stewart. -- Jay Leno, the Tonight Show, June 17.

Martha Stewart is being investigated on possible insider trading charges. Yeah. Yeah, I think Martha might be guilty, 'cause today on her program she showed viewers how to make license plates. -- Conan O'Brien, Late Show with Conan O'Brien, June 13.

I was just telling the audience before I came out that it was a beautiful day here in New York City. It was such a lovely day that Martha Stewart was doing all her inside trading outside! -- David Letterman, Late Show with David Letterman, June 18.

Now, now Martha. It's not that we really believe you're guilty of insider trading. (You aren't, are you?) Surely, it is just some marvelous coincidence that you and your broker (and apparently some friends) decided to sell out just before the crash in ImClone shares.

How did you whip up such a recipe for trouble? This is one batch of bad publicity we could have done without.

If only you had flown non-stop in your private jet before Christmas to Mexico's snazzy Las Ventanas resort. If only you had not landed in San Antonio, Texas, to call your office. If only you had not spoken that day to Peter Bacanovic, your Merrill Lynch broker, who told you he thinks "ImClone is going to start trading downward." If only you had not instructed Bacanovic to dump your 3,928 shares of ImClone.

Martha dear, we understand you and Peter say there was a standing order to sell your stock if ImClone fell below $60 per share. But why is Peter's assistant at Merrill Lynch, Douglas Faneuil, the young trader who actually handled your ImClone sale, now suggesting there was no such order?

Why did the ex-husband of your co-passenger and friend Mariana Pasternak just happen to sell 10,000 ImClone shares the following day -- just before ImClone announced the FDA had rejected Erbitux, the company's experimental cancer drug? Just before the stock plummeted?

And what about your pal, former ImClone chief executive Samuel Waksal? He was arrested June 12 by FBI agents at his New York City apartment on charges of securities fraud and conspiracy. Waksal invoked the Fifth Amendment the next day at a House hearing and refused to answer lawmakers' questions.

The sad joke in this unfinished tale is that for selling her ImClone shares one a day before the FDA's bad news, Martha banked all of $228,000. Had she sold her shares after the FDA announcement, it would have cost her $43,000.

But the bad publicity has diminished Martha's roughly $600-million personal stake in her own public company, Martha Stewart Living Omnimedia, by at least $150-million.

It all gives new meaning to the remark Martha left long ago in her high school yearbook: "I do what I please and I do it with ease."

It's all enough to flatten even a Martha Stewart souffle.
source

eairler i was driving and listinening to npr, and they were talkin about worldcom, and it was making me feel sick to my stomach.

who do you suppose is next? RDixons thread seems more and more plausable with each new day.
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Old 27-06-02, 11:06 AM   #4
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According to the news I read, Martha put a delayed sell order in that would cause her shares to be sold if the price dropped below $60 a share. The order was said to be put in on Dec 10th. This is a common practice for stocks that have jumped in price and the floor is moves up as the stock price increases. She had some really bad luck that it activated the day before the news broke.
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Old 27-06-02, 06:08 PM   #5
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Angry ANd to think you offed me a job two 1/2 years ago!

Wow!...I don't think they will go down, but they are letting 17,000 plus employees too the unemployment line, that sucks big time!...I wonder who is next on the list chapter 11 episodes...
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Old 27-06-02, 07:43 PM   #6
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Quote:
Originally posted by mike4947
According to the news I read, Martha put a delayed sell order in that would cause her shares to be sold if the price dropped below $60 a share. The order was said to be put in on Dec 10th. This is a common practice for stocks that have jumped in price and the floor is moves up as the stock price increases. She had some really bad luck that it activated the day before the news broke.
That is according to what Martha says.
The broker who executed the transaction was not able to produce a written stop loss order from Stewart and his assistant has no memory of it either.
I think it's pretty stupid of someone worth millions to risk possible jail time for a measly little quarter of a million dollars worth of ImClone stock. Either very stupid or very greedy. The smart way to play that would have been to simply wait till the news broke and then immediately sold. That way she would have lost a few thousand dollars instead of the millions in paper losses from her company's stock tanking because of the scandel.
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Old 28-06-02, 09:25 AM   #7
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Worldcom's bankruptcy is bad for me. I use their local telephone service. Also, some of my internet access is routed through UUNET. If UUNET is going to, MSN will have a problem, right?
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Old 28-06-02, 11:16 AM   #8
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UUNET won't go down. The only thing that will go down is the number of WorldCom employees, starting today.
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Old 28-06-02, 12:26 PM   #9
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"Hey I'm gonna get you too, Another one bites the dust"

Xerox Restates $6.4 Billion in Latest Mess
(Reuters) - Xerox Corp. on Friday said it would restate five years of results to reclassify more than $6 billion in revenues, an expected move in yet another scandal to batter confidence in Corporate America's accounting. The announced rattled investors, who were shaken by the revelation earlier this week by U.S. telecoms carrier WorldCom that it hid nearly $4 billion in expenses, and after several years of nagging questions about Xerox's accounting practices.

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Old 29-06-02, 09:21 AM   #10
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The new CEO of what's left of WorldCom responds to W's speach.



June 27, 2002


The Honorable George W. Bush
The White House
Washington, D.C. 20036


Dear Mr. President:


Yesterday you rightly expressed outrage and concern about past accounting irregularities at WorldCom. I want you to know that we, the current management team, are equally surprised and outraged. That is why we immediately brought this matter to the attention of the SEC and the public. I am proud that our own people discovered these irregularities and had the courage and professionalism to act quickly.

In that spirit, this letter reaffirms our commitment to working with you and the appropriate agencies to investigate this serious matter, and to set an example by accepting responsibility and taking decisive action, including:


· We have retained William McLucas, former Chief of the Enforcement Division of the Securities and Exchange Commission, to conduct a rigorous, independent investigation of these irregularities.

· We have dismissed our chief financial officer and accepted the resignation of our controller. We will take further action as the investigation warrants.

· We are in close consultation with our banks to secure additional lines of credit to preserve our ability to finance our debt.

· We are selling our non-core businesses and taking other actions to raise more than $1 billion. We are also trimming $1 billion in expense by refocusing on our core businesses.


We are dedicated to preserving the value of our company and its long-term viability for our employees, our customers, lenders, suppliers and shareholders in the wake of our findings. We feel a tremendous sense of responsibility to these groups, and to the general public.


Seven weeks ago, as I assumed the position of CEO of WorldCom, Bert Roberts, our Chairman, and I pledged to restore trust in this great company. Never did we imagine it would be put to such a test. However, part of restoring trust means being straight about problems as we discover them -- and aggressively solving them. This is the only way we will rebuild our company’s credibility. You have our commitment that we will continue to do this.


Sincerely,


John Sidgmore
President and CEO
Bert Roberts
Chairman of the Board
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Old 08-07-02, 05:30 PM   #11
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WorldCom Execs, Ex-Auditors Clash
Mon Jul 8, 7:10 PM ET
By MARCY GORDON, AP Business Writer

WASHINGTON - WorldCom executives clashed with former auditors Monday over responsibility for nearly $4 billion in accounting improprieties that rocked U.S. markets. The telecommunications giant's former CEO and finance chief refused to testify to a House panel investigating the debacle.

WorldCom Chairman Bert Roberts called auditor Arthur Andersen's failure to uncover the irregularities "inconceivable."

Former Andersen partner Melvin Dick countered that auditors rely "on the honesty and integrity of the management of the company." He said he understands WorldCom's former chief financial officer, Scott Sullivan, has acknowledged he never told the accounting firm about the questionable bookkeeping.

Sullivan invoked his Fifth Amendment right against self-incrimination before a packed hearing of the House Financial Services Committee, saying he was doing so "based upon the advice of counsel."

WorldCom's former chief executive officer, Bernard Ebbers, did the same, saying his Washington attorney, Reid Weingarten, advised him to remain silent because of ongoing investigations by the Justice Department ( news - web sites) and the Securities and Exchange Commission ( news - web sites).

"I do not believe I have anything to hide," Ebbers said. When all the facts are out, he said, "I believe that no one will conclude that I engaged in any criminal or fraudulent conduct."

Members of the panel — Democrats and Republicans alike — attacked the company, the Andersen accounting firm and Wall Street analyst Jack Grubman, who promoted WorldCom stock.

Several grilled company founder Ebbers, asking, for example, about the $400 million in loans he received from WorldCom and his $1.5 million severance package. Ebbers, sitting stonily with arms crossed, repeatedly cited his Fifth Amendment privilege and declined to answer.

WorldCom, whose interests include No. 2 long-distance telephone company MCI, is battling to avoid bankruptcy after disclosing it disguised $3.9 billion of expenses as capital expenditures to appear more profitable. The SEC has filed a civil fraud suit against WorldCom. The company's shares have plunged from more than 63 in June 1999 to 22 cents Monday.

WorldCom is the latest major corporation to face allegations of executive wrongdoing and accounting irregularities — driving down public confidence in business and the stock market. Congress already is investigating the bankruptcies of Enron Corp. and telecommunications company Global Crossing and the role played by accounting firms. Andersen has been convicted of obstruction of justice for destroying Enron-related documents.

Then Monday came news that pharmaceutical titan Merck & Co. had in the past three years counted $12 billion in revenue that it never collected. Merck made the revelation in an SEC filing Friday.

Trying to shore up investor confidence, President Bush ( news - web sites) is proposing tougher penalties — including jail time — for corporate officials who lie on financial statements.

"We'll vigorously pursue people who break the law. ... That will restore confidence" in the markets, Bush said at a White House news conference.

The president endorsed the goals — but not all the details — of legislation now before the Senate written by Banking Committee Chairman Paul Sarbanes, D-Md., that would tighten oversight of the accounting industry. The administration wants to empower the SEC to ban corporate executives and directors who commit wrongdoing from serving in those roles again, a step the bill does not take, but which Democrats support.

Accounting firms and corporations can no longer be trusted to police themselves, Sarbanes said in a Senate speech Monday as he began pushing for passage of the bill.

John Sidgmore, WorldCom's president and chief executive officer, blamed the company's former management for the accounting problems.

"WorldCom uncovered this problem internally," Sidgmore said in prepared testimony. "The kind of initiative demonstrated by our internal audit group is to be applauded and will continue to be encouraged."

Roberts called the accounting improprieties "an outrage to me," and said Andersen was responsible. "To my mind, the failure of our outside auditors to uncover them is inconceivable," WorldCom's chairman said.

Dick, the senior Andersen audit partner for WorldCom, testified that neither he nor anyone on the Andersen team "had any inkling" of the improper accounting.

Rep. Barney Frank ( news, bio, voting record), D-Mass., lashed out at Dick, saying, "I congratulate you on your ability to evade so calmly."

Grubman, the financial analyst, said he wrongly rated WorldCom highly for too long, but insisted he did not know of the huge earnings misstatement before downgrading his recommendation for the stock June 21.

The House committee chairman, Rep. Michael Oxley ( news, bio, voting record), R-Ohio, said no other company in recent scandals "has yet shown the audacity to commit fraud on the scale that has been alleged here."

Lawmakers including Senate Majority Leader Tom Daschle, D-S.D., Sen. John McCain ( news, bio, voting record), R-Ariz., and Rep. John Conyers ( news, bio, voting record) of Michigan, the House Judiciary Committee ( news - web sites)'s top Democrat, have called for the resignation of SEC Chairman Harvey Pitt, in part because of his former ties to the accounting profession.

But Bush gave Pitt a vote of confidence: "Harvey Pitt was put in place to clean up a mess and he's working hard to do that."


source

classy bunch...
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Old 17-07-02, 06:46 PM   #12
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busted

not busted

any more questions?
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Old 17-07-02, 10:29 PM   #13
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Are people really going to forget about Enron because of all of this? Bush has exceptionally close ties with the head of Enron, yet said he "didn't know him" when first asked right as the scandal hit. Is this Worldcom blowup really gonna blow Enron over, or will it give some gas to the investigation to how closely tied the Bush administration is/was to Enron?
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Old 17-07-02, 10:43 PM   #14
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enrons home office was located where?

bush worked/schmoozed/partyed with(then drove home drunk) the guys who represent energy and money in what state? hell they gave him cool jobs.

to me heres the rub.

clinton sucked, regan sucked(extra much, its comforting to know hes drooling now)

, bush sr and jr sucked/suck yadda yadda.

its cause they dont represent the people, or whats good for the nation. they represent privilidge, as do all of congress. its kind of cool that people or the sheep as i like to call them are acually starting to notice the idea that maybe the rich screw the poor to get richer, what a novel concept. the differance is now its in the news. but soon enough, there will be enough new 'top storys' without much content to take over and steer the sheep back into the pasture where their intended to be.

"What do you get for pretending the danger's not real
Meek and obedient you follow the leader
Down well trodden corridors into the valley of steel
What a surprise!
A look of terminal shock in your eyes
Now things are really what they seem
No, this is no bad dream."

Roger always did have a gift for observing the world

ok, now you can turn yer tv back on, and watch that drivel their sendin down the pipe, and forget...
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Old 26-03-03, 12:50 AM   #15
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and another one gone
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Old 14-01-04, 08:18 PM   #16
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Former Enron Exec Fastow Pleads Guilty
1 hour, 32 minutes ago

By KRISTEN HAYS, Associated Press Writer

HOUSTON - Andrew Fastow, chief architect of the shady, off-the-books deals that brought down Enron, pleaded guilty along with his wife Wednesday in an agreement that could take prosecutors to the top of the corporate ladder at the scandal-ridden company.

The plea bargains represent the biggest breakthrough yet in the two-year investigation into a scandal that led to the energy giant's collapse and rocked Wall Street and Washington alike.


Fastow, Enron's former finance chief, agreed to a 10-year prison sentence that will make him the highest-ranking executive to do time in the case. He also agreed to forfeit $23.8 million and help the government build a case against the executives who once occupied Enron's most opulent top-floor office suites: former chairman Kenneth Lay and former CEO Jeffrey Skilling.


"I and other members of Enron senior management fraudulently manipulated Enron's publicly reported financial results," Fastow, 42, said in a statement, adding that the purpose was to mislead investors and inflate the company's stock price and credit rating.


Fastow's wife, Lea, pleaded guilty to filing false tax returns related to Enron's ill-gotten gains. Lea Fastow, also 42, was Enron's assistant treasurer.


Andrew Fastow, clad in a gray suit, showed no emotion during the proceeding but flashed a smile afterward as he prepared to leave with his attorneys. He did not speak to reporters. His wife was not seen in the courtroom, though his parents and brother sat in the packed gallery.


Without a plea, he would have gone to trial on 98 counts of fraud, money laundering, insider trading and other charges.


Prosecutors say Fastow masterminded a sea of partnerships and tangled financing deals that hid Enron debt and inflated company profits while funneling millions of dollars to him, his family and selected friends. The partnerships had names like LJM (the first initials of Fastow's wife and two sons) and Chewco (after the "Star Wars" character Chewbacca).


He pleaded guilty to two counts of conspiracy to commit fraud — one covering the LJM partnership, the other involving transactions that Fastow used to pocket an estimated $45 million.


"I also engaged in schemes to enrich myself and others at the expense of Enron's shareholders and in violation of my duty of honest services to those shareholders," Fastow said.


Lea Fastow's deal calls for a five-month prison sentence and a year of supervised release, including five months of house arrest. But U.S. District Judge David Hittner will decide later whether to accept the sentencing deal. She still has the right to withdraw the plea.


The plea negotiations had stalled last week after Hittner refused to guarantee her a five-month prison sentence — a condition that Fastow's attorneys did not like.


The final deal calls for the same prison time, and Hittner still has the right to alter Lea Fastow's sentence, which the family insisted on to ensure that their two young sons have at least one parent at home.


"There really is life after Enron for all of us, we believe, and we're trying to get through this process the best we can," said Lea Fastow's lawyer, Mike DeGeurin.


Some experts believe Andrew Fastow's plea could break open the case against Lay and Skilling.


"Unquestionably, this is the breakthrough that the government has been pursuing," said Robert Mintz, a former federal prosecutor and an expert in white-collar crime. "There is nobody besides Fastow who can make this case for the government and that's why they have been pursuing him for so long and so aggressively."


When asked if prosecutors expected more indictments, Leslie Caldwell, head of the Justice Department unit investigating the company's downfall, did not answer directly.

"The investigation is very active and this is a significant development which I expect will yield results," Caldwell said.

"This is very significant to the Enron Task Force because whatever Andrew Fastow knows about what went on the the 50th floor, the Enron Task Force will now know as well," she said.

Lay and Skilling have steadfastly maintained their innocence. Lay's attorney, Michael Ramsey, said Wednesday that Lay has no worries if Fastow tells the truth.

Bruce Hiler, Skilling's attorney, said his client had done nothing to merit charges. "We understand the pressure to enter a plea rather than stand trial in the poisoned atmosphere that has been created around Enron, but that doesn't change the truth as to my client," he said.

Enron declared bankruptcy in December 2001 amid mass layoffs, leaving investors and retirees stuck with worthless stock. In the following months, WorldCom, Global Crossing, Adelphia Communications and others suffered a similar fate as investigators uncovered a raft of accounting failures across corporate America.

Enron was the nation's seventh-biggest company in 2001, and its bankruptcy was the largest such filing in U.S. history at the time. Its stock once traded at above $90, but sank to mere pennies amid the collapse.

Enron also became a source of ammunition for Democrats because of President Bush's close ties to Lay, a major campaign backer.

Fastow said through his lawyers when he was initially charged in October 2002 that he never believed he was committing any crime.

"Enron hired Andy to arrange off-balance sheet financing. Enron's board of directors, its CEO, and its chairman, directed and praised his work. Accountants and lawyers reviewed and approved his work," his lead attorney, John Keker, told reporters at the time.

Fastow and Lay, among others, declined to testify before a U.S. House committee looking into the Enron collapse, but Skilling did answer questions in February 2002. He said he knew of no problems at Enron when he abruptly resigned in the summer of 2001, citing family reasons


source

--------------------------------------------------------

like wow, the wheels of justice are turning? i guess 10 years with no parole is better than just walking free, but i tend to doubt Kenny boy will get in any trouble, as he is so close to Cheney and Bush, why 'little Kenny' as Bush used to refer to him, is the largest contributer to Bushs campaign funds.

edit..ya know, this thread is about US corporations cheating, stealing, and fucking people over. is that political?
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Old 16-01-04, 05:05 PM   #17
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can't wait for the film
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