WorldCom agrees to permanent injunction

Bankrupt telecommunications carrier WorldCom has entered into a settlement with the US Securities and Exchange Commission (SEC)...

Bankrupt telecommunications carrier WorldCom has entered into a settlement with the US Securities and Exchange Commission (SEC) civil lawsuit over its accounting practices, agreeing to a permanent injunction.

In the agreement, approved today, the company neither admits nor denies the SEC's allegations of fraud.

The SEC or the court may still seek a future civil penalty to be paid by WorldCom, or further sanctions.

WorldCom, which filed for Chapter 11 bankruptcy protection in July, is mired in a $9bn (£5.8bn) accounting scandal. Allegations of improper accounting at the company have brought shareholder lawsuits and Congressional investigations in addition to the SEC's civil suit.

Today's injunction requires WorldCom to do the following:
  • Not violate securities laws in the future

  • Provide education and training for senior operational officers and financial reporting staff to prevent future accounting problems

  • Retain a consultant to review the effectiveness of WorldCom's accounting controls and policies

  • Have the corporate monitor in the case review the adequacy and effectiveness of the company's corporate governance and ethics policies.

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