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Ex WorldCom Directors Fork Over Their Dues
By Chris Crum
Staff Writer
Article Date: 2005-01-07
To settle a lawsuit from its investors, Ten former directors of WorldCom will pay $18 million from their own pockets.
The investors lost hundreds of millions of dollars as a result of the company's 2002 accounting fraud fiasco.
``This is the best form of deterrence,'' said Bruce Carton, executive director for securities class actions services at Institutional Shareholder Services. ``If you can get the individuals who are involved to realize there is a prospect of losing personal wealth if they don't do their jobs, then you will possibly influence behavior.''
Well, doesn't that make perfect sense?
An article from The Ledger says:
"The directors' personal payments were a requirement of any deal from the start of the negotiations, according to lawyers involved in the settlement. Given the size of the WorldCom debacle, the investors who brought the case sought to make an example of the directors, lawyers involved in the settlement said.
The amounts being paid will be different for each director. While the exact individual amounts were not disclosed, the payments will account for 20 percent of the directors' aggregate net worth, not counting their primary residences and retirement accounts."
About the Author:
Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.
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