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WCOM vs. S&P 500 vs. Peer: 10 Year Returns

0

100

200

300

400

500

600

700

800

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

WCOM

S&P

PEER

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Epilogue: WorldCom/MCI• WCOM once valued at $115 billion• Settlements

– WorldCom paid $750 million civil penalty to SEC in 2003

– Investment banks settled for over $6 billion ($2.6 from Citigroup)

– 830,000 individual and institutional investors received payments

• Postscript– Qwest and Verizon pursued acquisitions of MCI– Verizon acquired MCI on February 14, 2005 for $5.2

billion (Qwest bid was higher)

Loss = $110B

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Epilogue: Employees• Ebbers (CEO): 25 years• Sullivan (CFO): 5 years (plea)• David Myers (Controller): 1 year, 1 day• Buford Yates (Director of Accounting): 1 year, 1

day• Betty Vinson (Accounting Department Manager):

5 months prison, 5 months house arrest• Troy Normand (Accounting Department

Manager): 3 years probation

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