Posted on 06/26/2002 7:10:44 PM PDT by kattracks
NEW YORK (AP) -- The chairman of the Securities and Exchange Commission announced Wednesday that his agency has filed fraud charges against WorldCom Inc., a day after the company disclosed it had grossly overstated is profits in one of the largest accounting scandals ever.
Harvey Pitt also lashed out against congressional critics who questioned his leadership, and he defended his agency's role in restoring confidence in America's financial system.
Pitt also said he was directing the chief executive officers and chief financial officers of the largest 1,000 companies in the country to vouch for the accuracy of their financial statements.
Pitt stressed that the selection of the 1,000 largest companies was not intended to limit the scope of the agency's scrutiny of corporate finances.
``No one is getting a pass,'' he said.
The action filed Wednesday in federal court in New York was also aimed at preventing both the destruction of documents by WorldCom and payouts to WorldCom executives past or present while the SEC continues investigating, he said.
Earlier in the day, Sen. John McCain, R-Ariz., questioned whether the SEC can be effective under the leadership of Pitt, who represented big Wall Street brokerages and major accounting firms as a private securities lawyer.
Pitt struck back at those critics and defended his agency's enforcement staff and their ability to hold corporate America accountable for its misdeeds.
``I will not stoop to the level of those who seek to attack the diligent agency for political revenge,'' he said at a news conference before a scheduled appearance in New York Wednesday evening.
``The system needs repair. We are repairing it. I have no interest in blaming anyone for the system I have inherited,'' he said.
Pitt said that in the 10 months since he has taken over as SEC chairman, the agency has laid out an effective series of measures in order to make the U.S. financial system more accountable to investors.
Pitt also told congressional budget leaders Wednesday that his agency was going to need more than the 100 additional professionals than he has already asked for in order to handle the growing load of enforcement actions.
The House voted overwhelmingly Wednesday to authorize a 77 percent boost in the SEC's budget, raising it to $776 million for the fiscal year beginning Oct. 1.
``We are committed both in word and in deed to taking every conceivable action to make sure that a system that was allowed to go unimproved for far too long is now improved,'' Pitt said.
Too little too late.
It's about time. I work in the industry. I've seen a lot of friends that I have worked with lose their jobs because of the way some of these telecom CEO's have run once strong companies into the ground because of their own greed and outright fraud. I hate seeing the feds go on the warpath in business, but they need to make an example out of everyone who participated in these acts. Serious time in prison. And I don't mean a "club-fed" summer camp...I mean the same place where the armed robbers and car jackers end up. Let them spend 10 years being cell mates with Bubba and all of his sexually frustrated friends.
Sorry to rant, but a lot of peoples lives have been screwed up and an entire industry has been trashed because of what these fools have done. I don't even work for Worldcom, but that didn't stop the panic that cut the share price of my company in half today, just because Worldcom and Global Crossing have given the whole sector a bad name. GRRRRRR!!!
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Meanwhile, Congress rolls merrily along, doing it's normal thing, taking money from contributors, passing all sorts of legislation helping one cause or another, conducting business as usual, taking care of friends and constituents, making speeches, smearing opponents, planning for elections, taking, spending, partying, returning tainted money received from Enron or Worldcom.
It was the U.S. Congress that Benedict Arnold wanted to capture right after he switched sides and took command of a British loyalist brigade; but Arnold was instead sent to advise Cornwallis, and he advised Cornwallis to avoid battle in the Yorktown region. The rest is history.
Meanwhile, Congress hasn't changed much. And there are things much more important than cleaning house in Congress, the White House (Clinton), or headquarters in Ramallah. Things such as shoes and ships and sealing wax, about cabbages -- and kings -- and parties.
You must be dreaming. If history is an indicator, one of them will end up being the President.
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