The Great WorldCom Scandal

Meet Stephen Teele. Mr. Teele had worked for WorldCom for over two decades, had his entire $1 million of his 401(k) invested into WorldCom stock, and was ready to begin his early retirement in a few short years. After the scandal, he was mailed a check for the rest of his 401(k), less than $500.00 (McClam, 2005). 

 

This isn't the only victim Ebbers and Sullivan created. The SEC reported in 2007 that the half-billion mark of investor reimbursements from its Fair Fund had been passed from the WorldCom scandal alone. An additional $250 million was to be distributed to the rest of the victims, in accordance with WorldCom's executives' court orders (SEC, 2007).

 

Employees were left out of jobs, out of pensions, retirement funds, salaries, and other irreparable damages. The costs of the crimes here are devastating. Companies in competition with WorldCom were forced to keep up with the efficiency that WorldCom was "producing", therefore driving them to commit fraudulent acts in order to cover up their own bankruptcies or extensive costs (Colvin, 2005).