House Panel Issues Subpoenas To WorldCom Execs, Analyst

WorldCom

Subpoenas are being issued to John Sidgmore, CEO; former CEO Bernard Ebbers; Scott Sullivan, who was terminated as CFO on Tuesday; and Jack Grubman, an analyst at Salomon Smith Barney.

Grubman downgraded WorldCom's stock rating to underperform from neutral on Monday, a day before WorldCom revealed it had improperly accounted for almost $4 billion in expenses in 2001 and the first quarter of 2002.

The Securities and Exchange Commission has since filed a civil suit against the carrier.

The WorldCom debacle is "yet another incident of accounting overreach," said Michael Oxley, chairman of the House Financial Service Committee, in a statement. "These alleged short-term gains created by the executives are going to cause long-term pain for the WorldCom families."

In addition, the WorldCom incident "dramatically underscores" the need for legislative and regulatory reform, said Oxley.

"If we are to restore confidence and prevent future corporate abuses on Wall Street, we first need to bring those responsible before the Financial Service Committee to get truthful answers about what happened," said John LaFalce, ranking member of the committee.