SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17594 / June 28, 2002
Accounting and Auditing Enforcement Release No. 1586 / June 28, 2002
Securities and Exchange Commission v. WorldCom, Inc., Civil Action 02 CV 4963 (S.D.N.Y.) (June 27, 2002)
COURT ORDERS WORLDCOM TO PRESERVE DOCUMENTS AND ASSETS, WILL APPOINT CORPORATE MONITOR
Based upon a joint agreement between the Commission and defendant WorldCom, Inc., U.S. District Court Judge Jed S. Rakoff today entered an order:
- Directing WorldCom and its affiliates to preserve all items relating to WorldCom's financial reporting obligations, public disclosures required by the federal securities laws, or accounting matters.
- Providing for the Court to appoint a Corporate Monitor having oversight responsibility with respect to all compensation paid by WorldCom. The Corporate Monitor will have responsibility to prevent unjust enrichment as a result of the conduct alleged in the Commission's complaint and to ensure that WorldCom's assets are not dissipated by payments that are not necessary to the operation of WorldCom's business.
- Forbidding, until the Corporate Monitor is in place, WorldCom from (1) paying more than $100,000 to any present or former officer, director or employee, or any of its affiliates; or (2) making any extraordinary payment to any present or former WorldCom director, present or former officer who holds or formerly held a position at or above the level of vice-president, or any person currently or formerly employed within WorldCom's financial reporting or accounting functions.
- Directing WorldCom to cooperate with the Corporate Monitor in full and make its books, records and accounts available to the Corporate Monitor.
For further information, see Litigation Release No. 17588 (June 27, 2002), announcing the filing of the Commission's civil action against WorldCom.