MCI, the former WorldCom, agreed today to settle accusations of fraud by the Securities and Exchange Commission by paying a $500 million penalty that will ultimately be given to investors.
The penalty was the largest ever sought by the commission, and the agreement resolves the biggest fraud case ever filed by the agency. If it is approved by a federal judge in Manhattan, it will also remove one of the last significant obstacles to MCI’s emerging from the largest Chapter 11 bankruptcy ever filed.
I am glad they are paying a fine, but this is not enough. I agree with SBC Communications:
But some of MCI’s industry rivals said that the settlement was too small and ineffective. “This is a pittance compared to the significant financial harm they’ve caused investors, pension funds, the marketplace and even their own customers,” SBC Communications said in a statement this afternoon. “We’re disappointed a company that can instigate this much trouble gets away with a slap on the wrist as a cost of doing illegal business.”
And lawyers representing investors led by the New York State employees’ pension fund who have filed a class-action lawsuit said that the $500 million would not satisfy claims of shareholders who say they have lost “tens of billions of dollars” from MCI’s misleading accounting.
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This pisses me off.