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WorldCom, SEC May Make a Deal

Company's fine could be among the largest in history, report says.

By Gillian Law, IDG News   

WorldCom is close to an agreement with the U.S. Securities and Exchange Commission that would settle all accountancy fraud charges against it, according to a report in The Wall Street Journal online edition Monday.

As part of the settlement WorldCom, now rebranding itself as MCI, is likely to pay a larger fine than the $10 million levied against Xerox last year, and potentially the largest fine ever levied by the SEC against a non-broker-dealer corporation, the WSJ said.

WorldCom is in the process of changing its official name to MCI.

Awaiting Approval

The agreement must be approved by U.S. District Judge Jed Rakoff, who will possibly hear the case as early as Monday, the report said.

SEC and WorldCom officials have been working since November 2002 to agree on the size of a fine, the WSJ said. Officials from both WorldCom and the SEC declined to comment on the report Monday.

The SEC first filed fraud charges against WorldCom in June 2002. In a series of startling announcements, WorldCom said it would restate its earnings due to accounting irregularities totaling almost $4 billion in June 2002, then admitted to a further $3.8 billion in errors in August 2002, finally increasing the total to over $9 billion in November 2002.

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