Bondholder Lawsuit Commenced Against WorldCom, Inc., Certain of Its Officers And Directors, and Arthur Andersen, LLP by Wechsler Harwood Halebian & Feffer LLP
PRNewswire
NEW YORK
Jun 28, 2002
Wechsler Harwood Halebian & Feffer LLP ("Wechsler Harwood") commenced a class action on behalf of all persons who purchased or otherwise acquired the bonds of WorldCom, Inc. ("WorldCom") (NASDAQ: WCOME) between April 26, 2001 and June 25, 2002 (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 ("1934 Act"). The complaint filed in the action names as defendants WorldCom, Bernard J. Ebbers, Scott D. Sullivan, WorldCom's Audit Committee members, and its auditor, Arthur Anderson, LLP. The action is pending in the United States District Court for the District of Mississippi at Jackson.
The complaint is based on an overstatement, by $3.8 billion, of WorldCom's earnings during the Class Period. As detailed in the complaint, instead of the $1.4 billion in profits WorldCom reported in 2001 and $130 million in the first quarter of 2002, WorldCom admits it lost money during those periods. As further detailed in the complaint, WorldCom, under the guidance of Messrs. Ebbers and Sullivan, booked basic operating costs as capital expenditures, a practice that reduced expenses, and allowed WorldCom to report falsely profits instead of losses in violation of Generally Accepted Accounting Principles,
WorldCom's Audit Committee and Arthur Andersen also knew that this type of accounting practice was improper yet knowingly condoned or recklessly failed to correct the subject financial statements. According to published reports, Andersen's audit reports "could not be relied upon for at least "the five quarters in question." As an experienced auditor charged with the responsibility of preparing disclosures to be filed with the SEC, Andersen knew the alleged conduct did not comport with GAAP, but either intentionally or recklessly disregarded this pervasive fraud to the detriment of the Class. Andersen, however, issued a March 7, 2002, "Report Of Independent Public Accountants," included in WorldCom's improperly prepared 2001 Form 10-K filed with the SEC on March 13, 2002. Anderson's opinion letter falsely stated that it had properly audited the Company's 2001 balance sheet and that in Anderson's opinion "[w]e believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WorldCom, Inc. and subsidiaries as of December 31, 2000 and 2001, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States."
If you purchased WorldCom bonds during the Class Period, you may request by August 27, 2002, that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood, which has extensive experience in prosecuting investor class actions involving financial fraud, has prosecuted securities, antitrust and consumer class actions for over 10 years. For more information about Wechsler Harwood Halebian & Feffer LLP, please visit its website at http://www.whhf.com/.
If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood Halebian & Feffer LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Samuel K. Rosen, Esq.: srosen@whhf.com; or Craig Lowther, Wechsler Harwood Shareholder Relations Department: clowther@whhf.com
SOURCE: Wechsler Harwood Halebian & Feffer LLP
CONTACT: Samuel K. Rosen, Esq., srosen@whhf.com, Craig Lowther,
clowther@whhf.com, both of Wechsler Harwood Shareholder Relations Department,
+1-877-935-7400
Web site: http://www.whhf.com/