SEC probes WorldCom
Regulatory agency seeks a range of financial, accounting information from communications company.
March 11, 2002: 7:00 PM EST

NEW YORK (CNN/Money) - Telecommunications company WorldCom. Inc. said Monday the Securities and Exchange Commission has asked for a range of financial information, including some related to its accounting procedures and loans to corporate officers.

The Clinton, Miss.-based company -- whose consumer long-distance unit is No. 2 in the US, behind AT&T -- said it is not aware of information that would prompt an SEC inquiry and it is complying with all the regulatory agency's requests.

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Specifically, WorldCom (WCOM: down $0.18 to $9.01, Research, Estimates) said the SEC is seeking information related to:

  • a pre-tax charge the company took against its third-quarter 2000 earnings associated with wholesale accounts;
  • disputed customer bills and sales commissions;
  • WorldCom's accounting policies for goodwill and implementation of FAS 142, an accounting rule under which public companies mush no longer automatically amortize, or write down, goodwill over a maximum of 40 years. Goodwill is the amount paid for a business that exceeds its fair market value;
  • WorldCom's organizational charts and personnel records for former employees;
  • loans by WorldCom to officers or directors;
  • the integration of WorldCom and MCI's computer systems;
  • WorldCom's tracking and review of analysts' earnings estimates;
  • and any federal or state agency investigations of WorldCom.

In a brief statement, the company said it believes all of its policies, practices and procedures have complied, and continue to comply, with all applicable accounting standards and laws.  graphic