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'Creative' Accounting: WorldCom Kept Two Sets of Books

Aired June 10, 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 to get a little business buzz right now. We're talking about Sam Waksal and the ImClone scandal this morning. In the meantime, there are new details about the biggest accounting scandal in U.S. history.
Live to New York now and Susan Lisovicz.

Which one you talking about -- Susan?

SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: WorldCom, the biggest corporate bankruptcy ever, Carol. And there are two new reports that link the company's former CEO, Bernie Ebbers, to the companies massive $11 billion accounting fraud for the first time. One of the reports accuses Ebbers of fostering a poisonous corporate culture and says he was aware, at the very least, that WorldCom was using financial gimmickry. Of course this scandal resulted in the company filing for the biggest Chapter 11 bankruptcy protection ever.

Ebbers, so far, has not been charged with any wrongdoing, although the company's former CFO, Scott Sullivan, faces charges of securities fraud. The report also says WorldCom kept two sets of financial books to mask its true operating results. The current -- the company's current chief executive said in a statement, the company has made significant changes since the revelation of the accounting fraud. Attorneys for Bernie Ebbers deny any wrongdoing -- Carol.

COSTELLO: Quick look at the futures before you go -- Susan.

LISOVICZ: Higher after a losing day yesterday. The corporate shakeup at Freddie Mac and an earnings warning from Motorola sent investors to the exits. The Dow industrials dropped 1 percent. The Nasdaq lost 1.5 percent -- Carol.

COSTELLO: All right. Susan Lisovicz, we'll get back to you in the next half hour, many thanks.

LISOVICZ: My pleasure.

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






Aired June 10, 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 to get a little business buzz right now. We're talking about Sam Waksal and the ImClone scandal this morning. In the meantime, there are new details about the biggest accounting scandal in U.S. history.
Live to New York now and Susan Lisovicz.

Which one you talking about -- Susan?

SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: WorldCom, the biggest corporate bankruptcy ever, Carol. And there are two new reports that link the company's former CEO, Bernie Ebbers, to the companies massive $11 billion accounting fraud for the first time. One of the reports accuses Ebbers of fostering a poisonous corporate culture and says he was aware, at the very least, that WorldCom was using financial gimmickry. Of course this scandal resulted in the company filing for the biggest Chapter 11 bankruptcy protection ever.

Ebbers, so far, has not been charged with any wrongdoing, although the company's former CFO, Scott Sullivan, faces charges of securities fraud. The report also says WorldCom kept two sets of financial books to mask its true operating results. The current -- the company's current chief executive said in a statement, the company has made significant changes since the revelation of the accounting fraud. Attorneys for Bernie Ebbers deny any wrongdoing -- Carol.

COSTELLO: Quick look at the futures before you go -- Susan.

LISOVICZ: Higher after a losing day yesterday. The corporate shakeup at Freddie Mac and an earnings warning from Motorola sent investors to the exits. The Dow industrials dropped 1 percent. The Nasdaq lost 1.5 percent -- Carol.

COSTELLO: All right. Susan Lisovicz, we'll get back to you in the next half hour, many thanks.

LISOVICZ: My pleasure.

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