Ryan Streetman
July, 26, 2011 WORLDCOM’S FALL AND THE CONTROVERSY OF SARBANES OXLEY
WorldCom provided telecommunication services of voice and internet. They began as a long distance reseller in 1984. The company was headed by Bernard Ebbers who became the CEO in 1985. The company didn’t go public until the middle of 1989. Through the years, WorldCom became more than just a telecommunications company. They were also information technology out-breakers. They were able to become an internet powerhouse and challenge their market “via mostly fiber-optic, business-oriented local networks” (Thyfault). WorldCom eventually became the largest telecommunications company in the late nineties due to the merger of many other companies. Their biggest merger was WorldCom and MCI in 1997. With this merger they became the second-largest long-distance communication behind AT&T. WorldCom didn’t stop there with IT breakthroughs; in lieu of the MCI merger they launched one of the first Virtual `Private Networks that are provided to companies. VPN’s are still used today in the IT industry. They even helped companies outsource the design and management of their web hosting operations (MCI). WorldCom was one of the most powerful companies and so big that when Sprint Telecommunications Company agreed to merge with MCI WorldCom, it would have been the largest merger in history. This would have created a giant monopoly in the economy. That’s why the government stepped in and brought about a violation of anti-trust statutes (Worldcom). This lead to government to investigate even further into WorldCom and what they found was more than just anti-trust statutes. The United States government found that WorldCom had fraudulently inflated its income and brought about some serious violations that would see all of its top executives sentenced to prison. The violations that were