Good Morning. On August 1, 2002 two men were indicted in a Federal Court House. These men aren't violent criminals, but they both face up to 25 years in prison. The two defendants hid a huge company's 41 billion dollars in debt from millions of investors and from the Securities and Exchange Commission. They caused a huge company to fall where it stood. If the woes of a bad economy weren't enough, large corporations are being cited for false and misleading accounting; the biggest and most extravagant being corporate telecom giant, WorldCom.
The birth of WorldCom began in 1983 when two businessmen had an idea to start a long distance phone company. They created and named their company Long Distance Discount Provider. The company became public in 1989 through the acquisition of Advantage Companies Inc. LDDS merges with Advanced Telecommunications Corp in 1992 completing an all-stock deal. In 1993 LDDS acquires two long distance phone companies making it the worlds number four provider.
United Airlines
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Verizon Center, Washington, D.C.These moves in the late 80's and early 90's set the company up for prosperous times in the future.
The actions of the early 90's were capitalized in the mid to late 90's turning the smaller company into the worlds number one long distance phone company. In 1993 LDDS acquires Resurgens Communications Group Inc. and Metromedia Communications through more stock deals. Within the year of 1995 LDDS changes its name to WorldCom. A large merger in 1996 sent MFS Communications Company Inc. and UUNet Technologies Inc. into the WorldCom melting pot. The biggest and most important merger in WorldCom's short history was the merger between MCI Communications Corp., Brooks Fiber Properties and CompuServe Corp., which included 40 billion dollars changing hands. The failed merger between WorldCom and Sprint damaged the company.
Financial problems became...