WorldCom developments at a glance
• WorldCom said it had misclassified $3.9 billion in corporate expenses over the past few years. The money went for routine maintenance and operations, but WorldCom falsely said it was an investment in its MCI long-distance network, the second-largest in the country.
• The distortion is likely to push the company, already reeling, into bankruptcy.
• With more than $100 billion in assets, a WorldCom bankruptcy would be twice as large as Enron's record-setting slide into Chapter 11 last fall and four times as big as Global Crossing's in January.
• WorldCom said it will start laying off 17,000 workers — about 20 percent of its global work force — tomorrow. The company also fired chief financial officer Scott Sullivan.
• The Securities and Exchange Commission filed a fraud action against WorldCom in federal court.
• As with Enron, WorldCom's auditor was Arthur Andersen.
• Trading in WorldCom was halted yesterday.
• Telecommunications and financial stocks were weakened amid investors' concerns about overall industry problems and that banks would lose money on WorldCom loans.
• U.S. state governments may have lost more than $1 billion on investments in securities sold by WorldCom. New York state's retirement system lost about $200 million, its largest loss ever on one investment. The California Public Employees' Retirement System, the biggest U.S. pension fund, estimated it lost $565 million on WorldCom's stocks and bonds.
• In Hawai'i, the state Employees' Retirement System said it owns no stock in WorldCom. Administrator David Shimabukuro said the $8.4 billion pension fund owns a $2.7 million WorldCom corporate bond through one of its investment managers, which represents less than 0.2 percent of ERS' $1.8 billion bond portfolio.
