Witness: Ebbers worried his work would be `wiped out' by falling stock
Wednesday, January 19th 2005, 11:02 am
By: News On 6
NEW YORK (AP) _ A former WorldCom executive testified today that as WorldCom accountants were ordered to hide billions of dollars in expenses, WorldCom chief Bernard Ebbers told executives that ``extraordinary things had to be done'' to turn the company around.
Former controller David Myers, who pleaded guilty to fraud, is testifying to bolster the government's case that Ebbers was aware of shady accounting at WorldCom and deeply concerned about its stock price.
The former CEO is accused of orchestrating the $11 (B) billion dollar accounting fraud that drove WorldCom into bankruptcy in 2002.
Myers recounted a June 2001 meeting of high-ranking WorldCom executives. By then, Myers said he had already been ordered by chief financial officer Scott Sullivan to hide the expenses by create false entries for assets on WorldCom's balance sheet.
At the meeting, Myers said, Ebbers referred to margin calls he was receiving from banks for loans he had taken out that were backed by WorldCom stock. He remembers Ebbers saying that if the stock slid below the mid-teens, his margin calls would be called and everything he'd worked for since would be wiped out.
At the same meeting, he said Ebbers told executives that -- quote -- ``while the company was in extraordinary times, extraordinary things had to be done.''