The WorldCom Scandal - A Simple Overview
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- เผยแพร่เมื่อ 5 ก.ค. 2024
- WorldCom committed one of the biggest accounting frauds in American history. This video gives a simple overview of it.
*Note: This video was completed in July 2019. Unreleased until now. I'm putting it out today, mostly unaltered, as part of my 6-years on TH-cam celebration.
I want to mention that Bernie Ebbers has since passed away.
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Company Declines:
Kmart: • The Decline of Kmart.....
Blockbuster: • The Decline of Blockbu...
RadioShack: • The Decline of RadioSh...
Solo Cups: • The Decline of Solo......
Toys "R" Us: • The Decline of Toys R ...
hhgregg: • The Decline of hhgregg...
Pan Am: • The Decline of Pan Am....
ESPN: • The Decline of ESPN......
Gibson: • The Decline of Gibson....
iHeartMedia: • The Decline of iHeartM...
Bon-Ton: • The Decline of Bon-Ton...
Kodak: • The Decline of Kodak.....
General Electric: • The Decline of General...
Woolworth: • The Decline of Woolwor...
Dell: • The Decline of Dell......
Sears: • The Decline of Sears.....
Payless: • The Decline of Payless...
Hostess: • The Decline of Hostess...
Redbox: • The Decline of Redbox....
Nokia: • The Decline of Nokia.....
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NASCAR: • The Decline of NASCAR....
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MoviePass: • The Decline of MoviePa...
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The Gap: • The Decline of The Gap...
Pier 1 Imports: • The Decline of Pier 1 ...
Sbarro: • The Decline of Sbarro....
AOL: • The Decline of AOL...W...
Long John Silver's: • The Decline of Long Jo...
Chuck E. Cheese's: • The Decline of Chuck E...
GNC: • The Decline of GNC...W...
Hertz: • The Decline of Hertz.....
Steak 'n Shake: • The Decline of Steak '...
CiCi's Pizza: • The Decline of CiCi's ...
Boston Market: • The Decline of Boston ...
Yahoo: • The Decline of Yahoo!....
Montgomery Ward: • The Decline of Montgom...
Fry's Electronics: • The Decline of Fry's E...
Souplantation: • The Decline of Souplan...
Gateway: • The Decline of Gateway...
BlackBerry: • The Decline of BlackBe...
Sports Authority: • The Decline of Sports ...
Atari: • The Decline of Atari.....
KB Toys: • The Decline of KB Toys...
Pizza Hut: • The Decline of Pizza H...
MGM: • The Decline of MGM...W...
FYE: • The Decline of FYE...W...
HP: • The Decline of HP...Wh...
Forever 21: • The Decline of Forever...
Guitar Center: • The Decline of Guitar ...
WCW: • The Decline of WCW...W...
Sega: • The Decline of Sega......
KFC: • The Decline of KFC...W...
Macy's: • The Decline of Macy's....
Circuit City: • The Decline of Circuit...
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I studied accounting in college. One of my teachers quit Arthur Anderson while this was going on. He said his moment of clarity was watching a manager threaten violence against one of his coworkers if he didn't sign papers he knew to be fraudulent. My teacher went home, thought about what was going on, and turned in his resignation letter the next day.
Good call. And to think I debated going into accounting at one point.
Man dodged a tactical nuke
Personal integrity is not sexy, and you might lose a bonus, but integrity will keep you from many pitfalls, money being one of the least important ones.
The manager was Suge Knight ? Lol
I damn near went to AA after college in 99 and was also wanted by Enron. I went to KPMG right across the Louisiana St. from AA in Houston. I had many mates from college who went with AA or Enron, several who worked for both. The ease of going from one to the other kind of demonstrates the problem.
Used to work in the old WorldCom building in Clinton. I remember my supervisor saying to me, "This building's foundation is made of deceit and lies!"
Lol
😮😮😮😮
I worked at SkyTel when WorldCom bought us out. It was never the same afterwards.
Hey at least he wasn't lying lol
worked for MFS which well merged with WorldCom
Unironically my MBA program mentioned this scandal like 10 times, but they never went into exactly what happened. Thanks for clarifying this.
I have a doctorate in mozzarella cheese production. And a minor flatulence studies. 👨🎓
@@Weeb_Destroyer What the fuck
@@michaelweir995 I worked hard for my degree. I’m sorry you are jealous of my 4.0 from Fartzmouth University, I was part of zeta del peenus
Side note; what is it with people named Bernie and committing some of the biggest frauds ever?
Did they bring up Eron as well? I’m not an accountant. I manage commercial properties so I deal with financials…create budgets, variance reports etc. as soon as I heard about their mark to market accounting, I do not see how that was not a scam. Nothing they did with their accounting was based on reality.
I worked at WorldCom in my early 20s throughout this scandal. It was very interesting to all be brought into a conference room to have Bernie Ebbers basically say on a pre-recorded message that the company has no money, and we’re all out of a job. Fortunately, as I was in my 20s, I was able to recover. Those long time MCI and WorldCom employees were not.
That’s crazy did you guys get laid off ? Or the company folded before that?
@@carnstar it was a bit of a blur at the time however, I believe we were given the option to stay with the company with no obvious future, but we at least had a job. The b2b Conferencing side held on a little longer than the commercial side I believe.
No golden parachutes for the common foot soldier ...
I was there too, out at the Ashburn "campus" in Northern Virginia. I watched them whittle our project down slowly with multiple layoffs over 6 months until they got to that last big one, I survived until then, but with a demoralized staff, the living began to envy the dead. Made a lot of friends which I still have to this day. One of the best IT teams I ever worked on, for 3.5 years.
☺ MJ didn't know what he was doing he played baseball didn't he.
These scandals were a daily thing back then. I remember watching the financial news and trying to guess who'd be next.
Who was next?
@@Almighty_Mage John Next. He fell in the tub but had Life Alert so he was able to call for help. Thank you Life Alert.
Are you enjoying it as much now? And NOW, we get the added benefit of anyone associating with a man named Epstein ;)
Help ive fallen and I can’t get up
Parmalat group in Italy maybe ? That's when auditors started to ask third parties balance confirmations to be routed trough them and not coming directly from the auditee. Oh look I have a new group debtor in the Bahamas for 150 M$ this year lol. @@Almighty_Mage
Bernie Ebbers was my parents Sunday school teacher…I’ll never forget this time period…crazy to see a TH-camr I follow cover this!
The almighty dollar, indeed.
@@JL-sm6cg Creflo Dollar in his case
@@realmdarkness HA HA HA!!! Creflo Dollar. HA HA HA!!!
The WorldCom and Enron scandals are why it's been the Big Four since I was in kindergarten
What are the big four?
@@jetfan925 because the fifth company they both used was hella corrupt
@@jetfan925 financial auditing firms
Accounting firms. It was the big ten when I heard about it first and it quickly got smaller after the scandals
@@jetfan925 exeggutor, snorlax, chansey, and tauros
When I was 16 I worked in a boiler room style call center for a company called Telecom USA. During training we learned that we were essentially MCI but we’re not allowed to say that to any prospective customers. It was a high pressure sales environment where the top closers were consistently using the same dirty tactics to scam seniors and were upheld as model employees. It was a bizarre crazy ride. I learned a lot and made a ridiculous hourly for a 16 year old. I believe it was like 13-16 an hour with overtime available during the time when 5.15 was minimum wage.
You worked for a reseller of MCI minutes most likely. I worked for a telecom company that had 5 switches in the USA and provided service over many states. They resold minutes to a partner. That paradigm still exists today as you see these small cellular companies pop up that own zero towers but lease the use of other towers.
Isn't it crazy we used to have these entry level teenager jobs that were lucratively well above minimum wage, now those same jobs still pay exactly the same or are $5/hr more and are now or just barely above minimum wage?
I'm the son of an MCI-WorldCom employee that was laid off during the bankruptcy. This was only a couple years after he was laid off as part of the Inacom bankruptcy. In both cases, he worked for a company that was acquired by the corrupt conglomerate (MCI and Vanstar) only to lose all his job security immediately. Going through this while I was a teenager is definitely a huge part of why I have little respect for corporate America to this day.
Job security is a myth. You putting faith in job security is why you have little respect for corporate America. That is on you. Everyone puts themselves first to some degree or another.
@@Caderic 😂😂
@@Caderic Corporate America is trash
@@Caderic youre not supposed to deep throat the boot.
Good.... especially when you see who they actually serve; *very* shady/corrupt players, and that's putting it nicely
I worked for MCI from the AT&T breakup days thru the Worldcom debacle. Lets just say that when we walked into work and found out we had been bought by the 4th largest telecom company (us being the 2nd largest at the time) we were all in disbelief. We found out shortly later how it all happened and lets just say as we were getting laid off the name Bernie Ebbers was not one you wanted to utter.
that sucks, dude. let this be a lesson to us all: when the folks in the C-suite make moves that make you say "what the- how the-... REALLY?!" it's time to refresh your résumé (that's a CV, for the folks outside the States) and make yourself a mere spectator
@@brugai8917 How about, "Job security is a myth."?
@@Caderic Exactly. Don't wait to refresh that résumé. Keep it fresh at all times.
I remember talking to an Ameritech (or whatever name they were under) as this was ending and he talked about how they were killing the company with cost cuts trying to match Worldcom's financial numbers. Only to find out it wasn't possible since it was a lie.
I live down the street from what was Worldcom's headquarters. It was a giant building in the middle of a bunch of fields. It's now Verizon and in the middle of dozen's of Data Centers. I had two friends, a husband and wife that both worked for Worldcom. Over night, they went from both making over $150K to the husband delivering pizzas. Worldcom laid miles of fiber in the area which is why 80% of the internet now runs through that area.
I worked out of the Ashburn "campus" too and the same thing happened to me. Went from $125K to unemployment. Sold my house in Chantilly and moved to San Diego to work for QUALCOMM. Never looked back.
I just had an idea. Make a new company with a name like Indernt. Swipe billions of dollars from investment firms, use the money to bolster internet infrastructure in the US. Go bankrupt and dissolve with a golden parachute and not go to jail. Company dies but the infrastructure stays. 😎
There's a lot more to why the ashburn area, Loudoun county, etc. have so much of the internet going through the area, though historical things play a significant roll, but that predates WorldCom, back to the nsfnet.
Did they save it or go homeless?
I love when you cover scandals! I learn a lot about business and accounting, oddly enough lol
Big Financial scandals humble everyone.
No one is completely immune
Cynthia Cooper, the internal auditor who uncovered the fraud, wrote a book about it. Extraordinary Circumstances. Highly recommended.
Ya I had to read that last semester for my financial accounting class at college. Very good book
Finding this now. TY!
All of these accounting scandals should be teaching every single company what our parents taught us as a kid; Don't tell lies, because the truth will eventually surface!
Too bad that’s overshadowed by all the times companies get away with lying and make a huge profit doing so. Particularly egregiously during the 2008 financial crisis when not only did they get away with making a profit off lying, they got a fortune from the taxpayer when their creative accounting finally backfired.
I remember this, mainly because it came so soon after the Enron collapse.
I have an anecdotal experience not related to the fraud, but even at the time I thought it was indicative of a poorly-run company: It' was around 2000 (before cell phones were ubiquitous). For my job I had a pager and a company-issued Worldcom card with a code I could punch in at payphones to have the charges billed to my credit card for reimbursement. I only made one or two calls per month with it, maybe 2 minutes long. But each month I received via mail a ~30-page invoice filled with boilerplate. It must have cost them 20x what my phone bill was to mail that.
I remember this vividly as I was directly affected. One of my parents was an senior engineer for them at MCI, it was hard for my dad to find work in IT up until the 2010's.
Worldcom scammed a lot of cell phone customers, I remember when they bought MCI and they raised the phones bills too high! My uncle filed a lawsuit when they ripped him off his phone bill, and lot of people went to the MCI Worldcom service center to either drop the charges or cancel their service!
I was one of those scammed customer.
@@PalBatey when they bought MCI, that’s when they got those customers and scammed them!
If this scandal, the Enron scandal, and the 2008 banking scandals have taught us anything, it's that we need watchers to watch the watchers. Aurthor Anderson was the trusted auditor, their job was to track and ensure proper accounting practices. The ratings agencies were trusted to rate bank loans and CDOs properly to ensure risks were called out.
And still, no one watches the watchers... the auditors and ratings agencies get all kinds of fees and need to report profit growth as well.
true, but "who watches the watchers?" is flawed because you keep adding levels with "who watches THOSE watchers?" until we're just living in a government surveillance state
@@summerlaverdure a government surveillance state is redundant. Private companies are already harvesting out data and selling to the government.
Best statement Ever!
@@summerlaverdure Wouldn't be opposed to a Government Surveillance State. The issue is more who is in the Government itself.
When I was in college, I worked at a time share condo and one of our annual guests would tell me about his stock in WorldCom. He was a retiree and this was a big part of his portfolio. I left the time share job a few years before the scandal, but I always wondered what happened to him.
So he had a big stake in WorldCom AND bought a timeshare… Damn… one born every minute!
@@jergervasi3331 LOL, HEY!!! He might have got a timeshare back when they were actually a decient invetment.
He bought WorldCom stock, sooooo...Proabaly not.
Always diversify.
I was in the middle of binge catching up on your videos and just finished the last one until I saw this pop on my notifications. Needless to say, this is a good lunch break
I watch his new ones on my Wednesday lunch breaks as well.
As a former Tyco employee I'd like to hear your take on that scandal
Did this Tyco have anything to do with the toy company?
@@JL-sm6cg no, no connection whatsoever
Dennis Kozlowski got too showy. End of story.
I was working as an accountant for a long distance reseller in the late nineties and my boss used to give me history lessons about the phone business to go along with my school experience. WorldCom got a lot of the money from them. Of course like most of the resellers, this one went out of business. I also went to work for nonprofits after that because it’s more complicated from an accounting perspective but less chance of fraud.
I did a term paper for my business ethics class at Nevada-Reno about Worldcom. Even well on my way to a degree in the subject at the time, Worldcom's accounting boggled my mind.
It was the genesis of my belief that the financial system is fundamentally broken due to the messed-up incentive structure of "earnings targets at all costs."
Agreed. The real issue is stockholder pressure. The obligation to stockholders is often in conflict with the obligations to law
@@Meatball2022 And that, in turn, invites the question of whether capitalism has a moral obligation to the public trust that goes beyond "make money and create jobs"...which has animated enough political debates that if I had a buck for each one I'd be the richest man on Earth.
@@SimuLord most companies forego short term nonsense like this for long term growth and gains. To me, as long as that is the true strategy and it’s disclosed, let the chips fall where they may.
The accounting firms have the majority responsibility here. It’s their fundamental job to catch stuff like this. Enron and worldcomm put Arthur Anderson out of business, but I can promise they had more shifty business than those 2 customers. Those were just the big ones.
The firms themselves need to do right, since they don’t have the same external pressures that the officers in the company do.
@@SimuLord I'm guessing that it boggled your mind cos you were studying Accounting, not Making Shit Up.
@@emilyadams3228 Well yes, there's that, but even given that, it was like "how did anyone involved think they were going to get away with this?" As dumb criminals go, they're right up there with bank robbers not wearing masks and taking a selfie with the teller as they're robbing them then posting it all over social media or something.
And the people who worked for Arthur Andersen...like, "they wanted to keep their jobs?! Hard to stay employed with a breach-of-trust conviction on your record!"
My mother worked for WorldCom (MCI before and then ATT after what was left was bought) and she said she saw the book cooking beforehand, but was told to shut up.
She was not involved in their money department, but saw a strange trend in corporate sales vs profits. She worked in corporate sales.
We lived in Houston. When Enron went, one of the execs committed unlive a few miles from my house and my partner went to school with one of the Women of Enron featured in Playboy.. it was a weird city to live in during the last crash.
Wait wut? There was a Women of Enron Playboy spread? Are you kidding
@@humb1s3rvant It's real. August 2002 edition. Enron was a pretty big company, not surprised it had some lookers willing to pose for money.
@@kutter_ttl6786 Well, think about it. Not only did the company they worked for fall through the Earth's crust, it was almost the whole American phone industry. And then there was Enron. Not the greatest thing to happen to the economy. A girl's gotta eat.
I was a contractor to MCI Worldcom during the dying days. When you walked into the office they had a little sign with the stock price that day. Over the course of 6 or 8 months I watched that sign start at like 80 and it was at like 10 when I left the job just before the total collapse. At that job they employed an army of people doing "provisioning" which is getting circuits turned up (ie getting your phone line activated). The job could be done in about 1 hour each day and the rest of the time was wasted. I sat adjacent to a middle manager who took all her conference calls on speaker and I got to listen to 2 hour phone calls where nothing was accomplished. I got pulled in at one point to help them figure out how to process orders for the FTS2000 contract which was a multi-billion dollar contract with GSA and found that they had been sitting on like a thousand orders for more than a year unable to figure out how to process them. I just called around the company talking to actual engineers til we finally figure out how to get some processed and it was like I invented fire around there. Worldcom would buy up little CLECs all over the country then never both to integrate them. So if I was doing a circuit in Chicago I needed to use Ameritel's 20 year old garbage software, if it was in Texas maybe its Brooks Communications old legacy garbage, etc etc.
It was the worst run company I have still ever witnessed from the inside.
Nortel would be a interesting company to talk about next. It was largely affected by the WorldCom crash as they were one of Nortel’s largest customer. It was once valued at $250 billion USD in the 2000s stock bubble.
I'd love to know what happened to Nortel, it's demise had a large impact on my small coastal UK town
@zakirsiddiqui1 thank you! I shall give it a watch :)
I worked at WorldCom during this time. It was a crazy change from being one of best companies in the world to a bankrupt one when Post Its required an official requisition.
I still have somewhere a t-shirt that says, "Sell Worldcom to me! I couldn't be worse than the last guy!"
I worked at the Mississippi printshop that did all their printing. Well I ran the bindery and shipping department. We had a cod list. If your name was on the cod list ,I knew the company was in trouble. Well ,one morning Worldcomm was on the cod list. I tried to warn a couple of friends,whose parents worked there and had their retirement in Worldcomm. They did not listen to me and lost. I told them we had thrown away over $100000 in printing.
I worked out the Colorado springs customer service office. There was a lot of weird stuff going on in the office we all who worked there was weird. One thing was the building we worked out of was ghost town we only took up one floor the rest of the floors were totally empty. And if u know the springs businesses are everywhere and always needing space. That was just one odd thing but there much more.
Good summary. I remember them and MCI because I worked in the Telecom industry during the 90s. You forgot to mention their acquisition of UUNet which was the largest Internet provider.
You already know it's a good day when company man uploads
We used them, both for PBX install/upgrade/maintenance (a hold-over from using Wil-Tel) and main LD carrier. I seem to recall an interview or documentary with an ATT exec saying that at the time, they couldn't figure out how Worldcom was able to offer LD so cheaply and still be profitable. After they accounting scandal it became apparent how (i.e., they couldn't).
I was inside the WorldCom hurricane, and I distinctly remember shaking my head and saying to my fellow employees...how can we possibly be making money? None of it made sense. One of the account reps replied to me and said "Scott Sullivan is an accounting genius that's why!" I was dubious, but I accepted that answer. I should have listened to my instincts.
I lost my job in 2002 during the bankruptcy. Since the developers weren't going to be allowed to really develop anything for a while, my department was eliminated, and our jobs given to the Devs, who were not happy about it. But they got to keep their jobs. Still, I had a lot of fun and learned a lot during my years at WorldCom.
I love the 'Scandal' series! So fascinating! Thanks Company Man!
Hey thanks for the great content every week. Ment to leave this sooner.
I started watching your channel around 2018, and look forward to enjoying your videos weekly. I started watching as a single man with no career or educational aspirations. I have since enrolled and finished college, found and married my wife, started my career at Enterprise Rent-a-Car, and we are expecting our first child. Can't thank you enough for this channel week after week! BTW a great topic for larger than you know is Enterprise!! It's a huge company....it is privately owned but it would be around 120 the fortunate 500 if traded publicly.
here’s a hug! happy for you man!!
I used to watch ur videos every Wednesday cant believe I stopped these videos are so entertaining will definitely get back into the grind!
Thank you so much for making these videos! These videos are like a therapy session for me. I let five or six of them build up and then I've binge watch them in one sitting.
Another great video! Here’s a suggestion: Make a video explaining how long distance telephone calls used to work, and the economics behind it. One of the few times consumers have had an expense REDUCED in life!
I say he does a video featuring AT&T, MCI, and Sprint. I recall that war. Lol
O man making a call to the next town over was a toll call depending on which day or night it was. Insane charges for long distance. Telephone cords!!!
In September 1973, my grandparents moved to 93rd St. & Taft (Ind. SR 55). 93rd St. is the northern border of Crown Point, Ind. in that area, so their house was only 120 feet inside Crown Point. We lived in a subdivision at Burr St. & US 30, in an unincorporated area between Schererville and Merrillville. When my dad got the October phone bill, he found that my grandparents' house, which was a four-mile drive away, was a toll call. A toll call charge was somewhere between local and long-distance, depending on how many exchanges away from your phone the other phone was.
Now I have unlimited time on my cell phone, and can call someone in California for less per minute than it cost to call my grandparents in 1973-78, even not adjusted for inflation.
Like the Steely Dan song says, "See the glory of the royal scam."
My first cell phone in 1998 was with Worldcom. Every time I would pay the bill, on time. They would come back and say it was not paid. I delt with that for about a year. And dropped them at the end of my contract. Went to Verizon and have been with them ever since.
Sprint pulled the same shit on me in 2010-11. Every few months, they'd send me a thing saying I hadn't paid my bill. Because I trust almost nothing, I saved my receipts, and would take these to the Sprint store and confront them, in person. After a year of that, I dropped them and went to Verizon. Two months later, Sprint sent me a thing saying that I hadn't paid my bill...for the MONTH AFTER I'D CANCELLED THEIR SERVICE. So I called an attorney I knew, and he said to go to the Sprint store with the receipt showing the service cancellation, and if they tried to stonewall me, just slam his business card down on the counter and say that from that moment forward, I would communicate with them only through him. Believe it or not, it actually came to that, even after I presented the cancellation receipt. But the slammed attorney card ended it. The dope at the counter looked like he was shitting his pants and said "Uh OK OK, I'll cancel the charge!!" I said "I want a printout of everything you just did." I got one. Then I went directly to the nearest Verizon store. After I concluded my business there, I called my attorney to tell him what happened, and he laughed heartily. I asked him if there was any charge for the advice, and he said not to worry about it, it was just a five-minute call, and in any case, that story was worth it.
That was 12 years ago, and I've had exactly zero problems with Verizon.
Ironically, Verizon is who took over the assets of WorldCom. So technically you still have WorldCom service.
I took a Forensic Accounting class once that I just called the WorldCom class because they were mentioned at least once per chapter. The literal textbook case^^ㅋㅋ
Imagine if we still enforced anti monopoly laws. Amazon, Apple, Google, a bunch of media companies, a bunch of private equity firms, most defense firms, ticket master, how many others would be broken up?
My dad nearly got a high-ranking job at Worldcom before the whole company was exposed. Scott Sullivan, the CFO, really liked him, but my dad didn't get along well with Bernie Ebbers and as a result he didn't get the job. This turned out to be a blessing in disguise.
By the way, my dad described Ebbers as a very paranoid man. Paranoid down to the way he talked, his mannerisms, his body language, everything. He knew something was off and he turned out to be completely right.
It's amazing how some companies get away with their scandals for as long as they do.
I'd love to see you do an update on AT&T now that their stock price is falling and they're in a massive amount of debt from all their acquisitions in the last 20+ years.
I wonder how much of AT&T's debt was Warner debt?
AT&T pretty much ended in 2005 when SBC purchased them, at that point all they were was a long distance landline company since Cingular had taken over AT&T Wireless the year before. Both those companies chose to use the AT&T name so that's why we still see it. What you see of AT&T now is not the pre-2005 AT&T, just its name.
Please cover more company scandals! This video was amazing
It is amazing how often I get letters from my brokerage about this or that class action lawsuit involving some company I own a few shares of stock in getting accused of some type of fraud. It's so common that only the really big cases seem to get much attention.
Company man, I’ll never get tired of the unique way you talk.
I've been an auditor for two years now at one of the top 10 accounting firms in the US. I heard about the WorldCom scandal during college. I can't believe the things auditors ignored. Obviously a lot of good has come out of it (SOX, better internal controls, etc.), but I just question the ethics of some of those accountants. I just can't imagine turning a blind eye to such a glaring mistake.
MCI Worldcom would bill the company I had worked at by having one phone number being called (on the bill mind you) 24 hours per day, so it would pad the charges. Fought them on the bill over a month. Got them to remove the number, then they billed it to another, a Wal Mart of all things.
Ive had no internet, moved my life out, and reset it all back in between painting new flooring new plumbing projects all in under a week. Sorry I missed your video you uploaded a couple days ago, been hectic. But I'm doing my part to give you my view now! : D Hope you've been well Company Man.
I had no idea!! I thought I was on the up and up about this stuff. Thank you!!!
I appreciate that the channel is adding background music. I would like to suggest having 3 to 4 tracks throughout the video. It makes the video more digestible, created mood shifts, and adds to the overall entertainment value!
Holy crap - I remember MCI back in the day! They were such a big deal!!
Can’t wait to see your Disney+ accounting scandal documentary
I love these crime videos!
Time to do a little time machine episode talking about AT&T, MCI, and Sprint when they were having the long-distance carrier wars in the 80s and 90s.
As always, great coverage of a scandal. When I was in my graduate accounting course, they talked more about Enron than Worldcom, but I still remember it as their headquarters is like a 90 minute drive from DC. The local news covered a lot of the local hardship that became of it. Plus, they bought the naming rights to our basketball/hockey arena. So, it went from Worldcom Arena, to MCI Center, to Verizon Center. Now it's Capital One Arena
Not really sure why this was recommended to me but great video. you made it easy to understand and interesting to someone with no accounting knowledge!
Excellent presentation, and pretty much the way I remember it.
Great content. Always enjoy your shows. Remember MCI and Worldcom well.
My mom worked for them growing up & when I went to college one of my classes had broke this down like you did, I think it's crazy that this happens over & over, but the real life effects of the decisions made at the top of a corporation is something really profound. It definitely changes lives.
Requesting more videos of this kind.
Thank you for making this video. As someone working in Telco at the time this is just how I remembered it. Also, I have been unable to explain what "long distance service" means to my kids.
I swear I thought that you had covered them already, but even if so, I'm happy to watch again 😂
I would love to see a video covering Tyco, please keep up the great videos! 👍
I love your videos about financial scandals, reminds me of American Greed. Good stuff bro 👍👍
Heard of them but not the details. Thanks for the video on it.
Very interesting video I always learn something from this channel. I would like to highly suggest a video on Nortel.
I knew of Worldcom, as I worked in the pager/paging industry from 1996 to 2005. I didn't know the extent of the fraud...WOW!
How about doing PageNet? Or as it's known now, Spok? People DO still use pagers.
Growing up in Tulsa Oklahoma WorldCom was one of the potential places to get a job after college if you had a Tech degree.....my how things came apart when I graduated college....
Another great company, man video
You should do a part 2 and talk about just how insane the CEO was. He was SUPER against technology so he refused to use email. He would make people PRINT out their PPTs for meetings. He also HAD to be included in almost everything. Even office supply purchases!
The background music is perfectly haunting for this video.
Wat song is it
Love the channel! I think making longer format videos could be very beneficial!
The pure innocence in the way you say “They were lying! Which is terrible!”
This brought back memories! I worked at Sprint when we were going to merge with WorldCom. I remember the frequent communications that went out about this deal. We mainly wanted their long-distance subscriber base. To think that within a few years long distance became, what one senior leader termed at the time “just a feature“. Boy, did our stock go way up and then way down.
In hindsight, the DOJ did you a favor, though perhaps some of Worldcom’s practices would have been exposed in the merger.
I've heard of both WorldCom and MCI over the years... wasn't ever really sure I knew what it was all about till now, thanks.
What did the long distancer carrier industry in was when cell phone plans started offering long distance at no charge. There was already a lot of competition with the rates, but that was more than any of them could handle.
Former worldcom employee here. I was a teen working at a call center in Wichita, ks and I made great money until the gig was up. We kinda knew it was fugazy because we were hella shady offering long distance to people. Good times. Cellular call centers were the place to work back then. MCI and Cingular paid for alot of Mexican brick weed😂😂😂
Too funny. And so true! MCI as a reseller was massive in the collect and prison industry in the late 90’s, early aughts. I worked for one doing long distance and collect calls during high school and the stories I could tell you of the people on the other line most wouldn’t believe. When I moved to WorldCom conferencing, it was a complete night and day difference.
@@blodyholy_ bro, it was a whole different planet back then! 😂😂😂
I tell ya company man you could make a video about anything and I’d still listen to it lol
Not sure how I found your videos or how you make stuff interesting that would normally bore me to death
I worked for AT&T while this was all happening, so I'm pretty familiar with the subject. Great and accurate video, as always.
I like it when you take a look at these scandals.
I hope you decide to do a video about the Phar-Mor scandal involving store founder Michael I. Monus in the future, since that guy's many scandals behind the scenes helped hasten the demise of the Phar-Mor discount pharmacy chain in 2002 after just 20 years in business...
I remember when this happened. I worked in a mci call center, it was my first job after high school, I had already quit when proverbial crap hit the fan, but I remember the call center closing and laying off a couple hundred people who had worked there for years. It's closing was front page news in Austin where I lived at the time.
I worked for a “Telcom” in 2001. We resold phone services and one of the things they had us do to cut costs was route calls through cheaper carriers till the customer called in to complain about the quality of the call. Our job was to placed them on a better carrier for a day then place them back on the cheaper carrier. Weeks-months later the customer would call back with the same complaint. Not to mention we would blame it on their phones which we’d instructed them to disconnect from power source for 10 seconds then plug back in and call us back. Crazy huh?
I had a Worldcom cell phone back then. I remember they called me and told me the service would be stopping soon cuz of all that. I had to get a different provider.
I remember the US was trying to get the EU to relax its accounting processes at the time that they saw as too slow and restrictive. Of course that didn't happen. In fact it became slower because everyone was now double checking anything out of the US. Everyone thought the yanks were all bent and didn't trust anything they said.
I grew up in Mississippi (was in HS during all this) where WorldCom was headquartered, we had family friends that lost everything in this ordeal. And having a mother and grandfather that were accounting professors, this was talked about occasionally you could say.
the question I have after hearing all this, how many of these schemes have worked? how many times was the earnings raised or lowered for expectations reasons and then readjusted for before they were caught?
I worked for MCI starting in 1988, and for WorldCom after it "bought" MCI. I never understood how the #4 telecom company could buy the #2 telecom company mostly with WorldCom stock. All I can say is once Bernie Ebbers took over, the company went to s#it. MCI was a decent company back when Bill McGowen ran it, and Ebbers ran it into the ground. Ebbers spent 13 years in prison, and died in 2020. The world is better off without the SOB!
You should do a video on Arthur Andersen. Prior to this scandal they were the biggest accounting firm in the US. This scandal is the reason why we have the big 4 instead of the big 5 now.
A vote to delve into some of those other scandals. Remember when Arthur Andersen was going belly up. The Sarasota Florida office held an off-site party in which the workers received an e-mail saying they have been fired. Management couldn't even tell them face to face.
I feel sorry for the staff of companies like this. A friend worked for AA. He wasn't even doing accounting, he worked with their software. He went to sleep one night after organizing upcoming projects and figuring out who would do what. In the morning learned he, and everyone else didn't have a job.
*In a southern woman's accent* "a company lying in order to get more investors? Why I never" (faints)
WorldCom: Our business is telephoney.
😂
I heard of MCI more than I did Worldcom and more of its long distance and telephone routing system services. I always remember the "MCI (beep beep) (switching noises) (click)" then it connected your call... Classic... Maybe I used calling cards and payphones too much back when they existed.
Awesome, as always.
Can you do Nortel, too?
The American Greed episode profiling this was the best example of this scandal and it used to be on TH-cam but now you cant find it anywhere.
I remember this company being briefly mentioned in "The Wire"
I had heard of WorldCom because it's referenced on the tv series The Wire a couple times, which is set shortly after the scandal