WorldCom Investors Still Seeking Compensation
March 18, 2005 — -- Stephen Teel spent 23 years working for MCI, investing all of his 401(k) contributions in company stock. After the massive fraud that brought down WorldCom -- which took over MCI -- and led to the collapse of its stock, his $1 million retirement nest egg was worth less than $1,000.
Teel, 56, had planned for an early retirement. Now he wonders how he'll finance any retirement at all. Still, he takes little pleasure from former Chief Executive Officer Bernard Ebbers' conviction on nine counts, including fraud and conspiracy.
"I don't like to see anything bad happen to anybody, so I wouldn't say I was happy to hear the news. What I really wanted to see was Ebbers step forward and admit fault, because I'm convinced in my heart that he knew what was going on," Teel said from his home in Allen, Texas.
Ebbers, 63, claimed during the six-week trial that the fraud was orchestrated by the company's chief financial officer, who testified as the government's star witness. Ebbers was convicted Tuesday and could get up to 85 years in prison when he is sentenced June 13. He is free on bail until then.
The resolution of the criminal case will likely have little impact on Teel's finances.
"Economically, this litigation won't do anything to help me out at all," he said.
WorldCom's stock price hit a high of $61.98 in June 1999, but plunged to 8 cents in June 2002 after investors learned it had fabricated $11 billion in profits. It is the largest corporate bankruptcy in U.S. history.
John Mosley, 51, faced a different scenario than Teel's. The owner of a successful auto body shop in Clinton, Miss., Mosley invested $27,000 in WorldCom stock in 2001. It was the first investment he'd ever made outside of an IRA and a couple of mutual funds, and he said he chose WorldCom on the advice of stockbrokers and the belief that he'd be investing in a hometown company. WorldCom was based in Clinton.
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