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Former WorldCom chief Bernard Ebbers dies aged 78

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Via Financial Times

Bernard Ebbers, the ex-WorldCom chief executive who presided over one of the largest US accounting frauds in history, has died aged 78, according to his attorney.

Ebbers, a former basketball coach, rose to the top of a thriving US telecommunications industry in the late 1990s before his name became synonymous with corporate malfeasance. 

He was convicted in 2005 for orchestrating an $11bn accounting fraud at WorldCom that bankrupted the company and was, at the time, the biggest in US history. It was eclipsed a few years later by the accounting scandal at Lehman Brothers that came to light following the 2008 financial crisis.

Ebbers was jailed for 25 years in 2005 but was granted early release in December last year after a judge found that his health was declining. 

Ebbers’ six-week trial marked the peak of an era of white-collar crime that followed the bursting of the internet stock bubble. In addition to Ebbers, prosecutors also pursued cases against chief executives from Tyco, Martha Stewart Living, Adelphia and other corporations. 

WorldCom emerged from a spate of 1990s telecommunications mergers. It first came to symbolise a booming, newly deregulated industry — and latterly the intense pressure companies faced to satisfy Wall Street’s short-term earnings expectations. 

Ebbers’ trial revealed that he encouraged WorldCom executives to “hit the numbers” even as business softened. They did so by booking expenses as capital investments, thereby boosting reported income. 

Rare among other chief executives from that era, Ebbers took the witness stand in his defence, insisting he had done nothing wrong.

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MCI WorldCom CEO Bernard Ebbers (R) and Sprint CEO William Ersey answer questions after announcing at a news conference October 5 that their companies will merge. The combined company, valued at $115 billion and to be called WorldCom, would have about 30 percent of the $90 billion U.S. long-distance market and create a formidable rival to market leader AT&T Corp.
Ebbers with Sprint CEO William Ersey in October 1999 announcing the merger of their companies © Reuters
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