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World Com And The Mississippi Scheme Scandals

1767 words - 7 pages

WorldCom and The Mississippi Scheme are both large financial scandals that have occurred. WorldCom was a telecommunication company that overstated their cash flow by reporting $7.6 billion in operating expenses as capital expenses. WorldCom is the largest accounting scandal in US history as of March 2002. The Mississippi Scheme was a business scheme that destroyed the economy of France during the 1700’s. The scheme involved the loss of paper money’s purchasing power as a result of asset inflation. Both WorldCom and The Mississippi Scheme were frauds involving manipulation to create higher stock prices and dubious practices within the organizations to keep the public unaware.
Bernie Ebbers was the founder and CEO of WorldCom. He took a small telecommunications firm and transformed it into an industry giant before it collapsed into bankruptcy in 2002. The stock prices of WorldCom began to fall in 2000 and in order to prevent the price from falling further WorldCom made mass loans to Ebbers to stop him from selling his stock. He initiated the fraud and false reporting. He did not give accounting details as to how the false reporting should occur but he did repeatedly say it was important to “make the numbers.”
Scott Sullivan was the CFO and on the board of directors of WorldCom. He oversaw the conspiracy to hide operating expenses in order to improve reported profits of the company. He advised Bernie Ebbers to inform the public of the WorldCom’s deteriorating situation but Sullivan’s advice was not taken. Ebbers had instructed Sullivan to adjust the accounting numbers.
David Myers was the controller of WorldCom. He instructed the accounting department to make billions of dollars in adjustments to financial statements in order for the company to meet Wall Street expectations. He was following the instructions of Scott Sullivan.
Buford Yates Jr. was the accounting director of WorldCom. He instructed the accountants to adjust financial records as the company was failing. He was acting on orders from his superiors.
Betty Vinson was the director of management reporting at WorldCom. Troy Normand was the director of legal entity accounting. They made some of the fraudulent entries. They did this because they were pressured by there superiors.
The Duke of Orleans became the Regent of France in 1715 and served as the ruler while the heir to the throne was a minor. Regent knew of John Law's financial expertise and asked for his advice and assistance in straightening out France's financial mess left over from years of uncontrolled spending under Louis XIV. The Regent approved Law’s scheme and allowed it to happen.
John Law was the founder of the Mississippi Scheme. He was the Controller General and Superintendent General of Finance which gave him control of all of France's finances and money creation. He also controlled the company that handled all of France's foreign trade and colonial development. The scheme he came up...

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