Synopsis
On june 25, 2002, WorldCom announced that would be restating its financial statements for 2001 and the first quarter of 2002. Less than one month later, on july 21, 2002, WorldCom announced it had filed for bank-ruptcy. It was later revealed that WorldCom had engaged in improper accounting that took two major forms: the overstatement of revenue by at least $958 million and the understatement of line costs, its largest category of expenses, by over $7 billion.
Several executives pled guilty to charges of fraud and were sentenced to prison terms, including CFO Scott Sullivan (five years) and controller david Meyers (one year and one day).Convicted of fraud in 2005,CEO Bernie Ebbers was the first to receive his prison sentence:25 years.