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CNN Live At Daybreak

MCI Settlement

Aired May 19, 2003 - 06:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: Time now, though, for a little business buzz. If you hate getting phone bills, and who doesn't, you might be interested to know MCI is about to get one big bill of its own.
Let's go live to New York and Susan Lisovicz.

How big is it -- Susan?

SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: Five hundred million dollars, Carol, that would be a record, yes, to settle its $9 billion accounting fraud case. The company will pay $500 million, which will go to shareholders of the No. 2 long distance carrier formerly known as WorldCom. That's expected to be paid when the company emerges from bankruptcy later this year.

The deal could be announced as early as today. It's the biggest fine levied to a non-brokerage company by the SEC. Let's keep this -- let's keep this straight because there've been a lot of fines lately. It reflects the scope of MCI's WorldCom units accounting fraud, which started at $4 billion and then ballooned to $9 billion. WorldCom filed for the biggest bankruptcy in U.S. history in July.

And, Carol, apparently this settlement will not affect a separate investigation into the behavior of a number of top executives at MCI, including the former CEO Chairman Bernie Ebbers. A number of them have already pleaded guilty, including the former Chief Financial Officer Scott Sullivan. So their day is still coming up, apparently.

COSTELLO: Yes, in the form of a different kind of punishment maybe.

LISOVICZ: Exactly.

COSTELLO: Susan Lisovicz, many thanks.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM AT www.fdch.com






Aired May 19, 2003 - 06:16   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Time now, though, for a little business buzz. If you hate getting phone bills, and who doesn't, you might be interested to know MCI is about to get one big bill of its own.
Let's go live to New York and Susan Lisovicz.

How big is it -- Susan?

SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: Five hundred million dollars, Carol, that would be a record, yes, to settle its $9 billion accounting fraud case. The company will pay $500 million, which will go to shareholders of the No. 2 long distance carrier formerly known as WorldCom. That's expected to be paid when the company emerges from bankruptcy later this year.

The deal could be announced as early as today. It's the biggest fine levied to a non-brokerage company by the SEC. Let's keep this -- let's keep this straight because there've been a lot of fines lately. It reflects the scope of MCI's WorldCom units accounting fraud, which started at $4 billion and then ballooned to $9 billion. WorldCom filed for the biggest bankruptcy in U.S. history in July.

And, Carol, apparently this settlement will not affect a separate investigation into the behavior of a number of top executives at MCI, including the former CEO Chairman Bernie Ebbers. A number of them have already pleaded guilty, including the former Chief Financial Officer Scott Sullivan. So their day is still coming up, apparently.

COSTELLO: Yes, in the form of a different kind of punishment maybe.

LISOVICZ: Exactly.

COSTELLO: Susan Lisovicz, many thanks.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM AT www.fdch.com