Details about Sullivan's sentencing and a handy-dandy Worldcom timeline, via Bloomberg:

From WorldCom's Origin to Sullivan Fraud Sentence: Timeline

August 11, 2005
By Carrie O'Reilly
Bloomberg

The following timeline lists events leading to and in the investigation of WorldCom Inc. and former finance chief Scott Sullivan, who was sentenced to five years in jail today for helping lead an $11 billion fraud that ended in bankruptcy.

The Timeline

September 1983: Businessmen Murray Waldron and William Rector meet in a Hattiesburg, Mississippi, coffee shop to discuss plans for a new reseller of long-distance service. A waitress scribbles the letters ``LDDC'' on a napkin and gives the company its first name, Long Distance Discount Co. The University of Southern Mississippi is the first customer.

April 1985: Early LDDC investor Bernard Ebbers, a former bar bouncer, basketball coach and hotel owner, is named chief executive officer.

August 1989: LDDC goes public by acquiring Advantage Cos.

May 1995: LDDC changes its name to WorldCom.

April 1998: Clinton, Mississippi-based WorldCom buys MCI Communications Corp. for $47 billion to challenge global telecommunications companies such as British Telecommunications Plc, France Telecom SA and Deutsche Telekom AG in selling businesses one-stop long-distance and data services.

June 21, 1999: WorldCom shares reach an all-time high of $61.99.

Sprint Merger Abandoned

July 2000: Ebbers abandons a planned $152 billion merger with the No. 3 U.S. long-distance carrier Sprint Corp. in the face of opposition by U.S. and European antitrust regulators.

June 8, 2001: Trading starts in tracking stock of WorldCom's consumer long-distance unit, MCI Group.

March 11, 2002: WorldCom says U.S. securities regulators are investigating loans to top executives and accounting practices.

April 3, 2002: WorldCom says it will fire 3,700 workers, or 4.4 percent of its workforce, in the face of declining demand and the accounting investigation.

April 25, 2002: The company says first-quarter 2002 profit fell 78 percent as long-distance sales slid.

Ebbers Quits

April 30, 2002: Ebbers, found later to have borrowed $408 million from the company in April, quits after 17 years as chief executive. Vice President John Sidgmore replaces him.

May 10, 2002: The three biggest credit-rating companies drop their ratings of WorldCom debt to below investment grade.

May 14, 2002: WorldCom shares fall in the most active day for a U.S. stock, with 413 million shares trading after Standard & Poor's says it will remove the company from its main index.

May 22, 2002: WorldCom says it will buy MCI Group stock to save $284 million in annual dividend costs.

June 5, 2002: WorldCom, weighed down by $30 billion in debt, says it will exit the wireless business immediately and cut jobs that some analysts estimate may total as many as 16,000.

WorldCom Admits Fabrications

June 25, 2002: WorldCom says it fabricated profit by misreporting $3.85 billion in expenses and fires Chief Financial Officer Scott Sullivan. The Securities and Exchange Commission says the earnings restatement for the first quarter and 2001 shows ``improprieties of unprecedented magnitude.'' WorldCom says it notified the SEC after auditors found expenses booked as capital expenditures. The company says it will cut 28 percent of its workforce, or 17,000 jobs.

June 27, 2002: The SEC says it will review $31.6 million in stock sales by WorldCom officers and directors during the 15 months that the company concealed losses.

July 12, 2002: Twenty-five banks sue WorldCom, claiming the company committed fraud in borrowing $2.5 billion six weeks before announcing that the expenses were misreported.

July 15, 2002: WorldCom is sued by the California Public Employees Retirement System, the largest U.S. pension fund, and other pension funds over $433 million in bond losses.

Debt Ratings Cut

July 17, 2002: WorldCom credit ratings on some debt are cut to D, indicating default, by Standard & Poor's after the long-distance carrier fails to make $74 million in interest payments.

July 21, 2002: WorldCom files for bankruptcy, reporting more than $35 billion in debts and $103.9 billion in assets, the largest U.S. bankruptcy ever measured by assets.

Aug. 1, 2002: Sullivan and David Myers, WorldCom's former controller, are arrested.

Aug. 28, 2002: Sullivan is indicted on charges of making false SEC filings to deceive investors and inflate WorldCom earnings.

Sept. 4, 2002: Sullivan pleads not guilty in federal court in New York.

Following Orders

Sept. 26, 2002: Myers pleads guilty to conspiracy and securities fraud and says he was following senior managers' instructions.

Oct. 2, 2002: Buford Yates Jr., WorldCom's former accounting director, pleads guilty to participating in fraud.

Oct. 10, 2002: Betty Vinson and Troy Normand, former WorldCom accounting officials, plead guilty to fraud and conspiracy.

Oct. 11, 2002: Myers pleads guilty in Mississippi to a state charge of conspiring to commit securities fraud.

Nov. 5, 2002: The SEC says WorldCom misstated $9 billion in income, almost $2 billion more than previously disclosed, and adds two charges to its civil suit against the company.

Nov. 15, 2002: Yates and Myers settle civil fraud charges with the SEC.

SEC Settlement

Nov. 26, 2002: WorldCom settles SEC fraud case, agreeing to hire an independent consultant to review its accounting and allow a court-appointed monitor to review its governance.

December 2002: Michael Capellas replaces Sidgmore as WorldCom chief executive officer. His $50 million pay package is approved on condition that court-appointed monitor Richard Breeden gets more say on the CEO's bonuses.

March 31, 2003: An internal investigation uncovers $11 billion in overstated profit, $2 billion more than previously disclosed.

June 9, 2003: Bankruptcy examiner Richard Thornburgh, a former U.S. attorney general, reports a ``board breakdown'' at WorldCom allowed fraud to flourish. Former SEC lawyer William McLucas, hired by WorldCom to examine company accounting, reports the fraud was a ``consequence'' of the way Ebbers ran the company.

Oklahoma Charges

Aug. 27, 2003: Oklahoma Attorney General Drew Edmondson charges WorldCom, Ebbers, Sullivan, Yates, Normand, Vinson and Myers with 15 felony counts of violating the Oklahoma Securities Act.

September 2003: Ebbers, Sullivan and WorldCom plead not guilty to the Oklahoma charges.

Oct. 17, 2003: Oklahoma agrees to delay its cases against Yates, Vinson, Normand and Myers until after Sullivan's federal trial.

Oct. 24, 2003: A federal judge allows investors and bondholders to pursue claims as a group against former WorldCom officers, directors and underwriters, including Ebbers, Citigroup Inc. and its former telecommunications analyst Jack Grubman.

Oct. 31, 2003: WorldCom, now based in Ashburn, Virginia, wins court permission to exit bankruptcy and rename itself MCI Inc.

Nov. 20, 2003: Oklahoma's Edmondson drops charges against Ebbers to avoid interfering with Sullivan's federal trial.

Sullivan Pleads Guilty

March 2, 2004: U.S. prosecutors charge Ebbers with directing the biggest accounting frauds in U.S. history. Sullivan pleads guilty to fraud, conspiracy and making false statements and agrees to assist prosecutors.

April 20, 2004: MCI, formerly WorldCom, exits bankruptcy after shedding $35 billion in debt.

July 6, 2004: MCI, Ebbers and 18 former WorldCom officials agree to pay about $51 million to settle a suit by employees who lost hundreds of millions of dollars when the company collapsed.

July 20, 2004: Judge approves Citigroup Inc.'s $2.65 billion settlement of a suit by WorldCom Inc. investors over the underwriting of the company's securities.

Jan. 25: Ebbers's fraud trial begins.

Feb. 17: Sullivan says he decided which one-time revenue items to use in financial reports to meet analyst expectations, ending a 6 1/2-day stint as the star witness in Ebbers's trial.

Feb. 22: At the trial, Ebbers criticizes Sullivan for having been ``too conservative'' with Wall Street analysts.

Ebbers Convicted

March 15: Ebbers is convicted of directing an $11 billion fraud that triggered WorldCom bankruptcy, the largest in U.S. history.

March 16: JPMorgan Chase & Co., the second-largest U.S. bank, agrees to pay $2 billion to settle claims by investors that the lender should have known WorldCom Inc.'s books were fraudulent when it helped sell $5 billion in company bonds.

March 18: WorldCom investors settle securities-fraud claims against 11 former company directors for $55.25 million.

March 21: Ex-WorldCom Chairman Bert Roberts agrees to pay $5.5 million to settle fraud claims by investors.

Settlements

April 25: Arthur Andersen LLP, WorldCom's auditor, agrees to pay $65 million to settle lawsuit over its liability in collapse, ending the largest securities-fraud class action in U.S. history.

May 2: MCI agrees to $8.44 billion takeover offer from Verizon Communications Inc., after spurning higher bid from Quest Communications International Inc.

June 30: Ebbers agrees to pay as much as $45 million to settle claims by the government, ex-employees and defrauded investors, leaving him with $50,000 and a ``modest'' home in Mississippi.

July 13: Ebbers sentenced to 25 years in prison for orchestrating the largest accounting fraud in U.S. history. He is ordered to report to federal prison to start serving his term on Oct. 12.

July 26: Sullivan, Myers and Yates settle a civil suit over the accounting fraud. The settlement forces Sullivan to turn over the 30,000-square-foot home he was building in Boca Raton, Florida, and hundreds of thousands of dollars in his 401(k) retirement plan. More than $6.1 billion has been recovered by investors from defendants including underwriters, accountants and directors.

Sentences

Aug. 5: Vinson sentenced to five months and in jail and five months home detention. Normand sentenced to probation.

Aug. 9: Yates sentenced to one year and one day in prison.

Aug. 10: Myers sentenced to one year and one day in prison.

Aug. 11: Sullivan sentenced to five years in prison and three years' probation.

The original article appears here.

-- MDT

Labels: New York AG, Quest