Tuesday, June 10, 2003
The low down on Worldcom: I confess to not having yet finished it, but this report by the court-appointed Examiner on the shady dealings at Worldcom in the years leading up to its implosion is downright scary. Examples of the company snapping up other companies for $2-6 billion based on a couple hours' worth (or less) of due diligence; mis-using borrowed capital; lying to investors about liquidity...it goes on and on. The worst is saved for Ebbers and Sullivan who clearly were on major head trips about what they could do in their respective positions. This is why transparency is so vitally needed in corporations, and the SEC remains a reactive, passive insitution that can only close the gate after the cows have left. If people want real market-driven economies, then the little engines that push the economy must remain accessible for inspection and fine-tuning as we go along.