Bernie Ebbers Sentenced to 25 Years in Jail for Securities Fraud
I attended Bernie Ebber's sentencing hearing at which Judge Barbara Jones issued a sentence of 25 years in jail for securities fraud. WorldCom's $11 billion fraud was the biggest securities fraud in corporate history. Tens of thousands of WorldCom employees and shareholders lost their life and retirement savings as a result of the fraud.
The sentence given to Bernie Ebbers was the stiffest sentence ever for an investment fraud. Ebbers who is 63 years old will effectively be serving a life sentence for securities fraud.
I believe that the sentence is tough but fair and was necessary given the severity of the crime. Hopefully, the sentence will send the message to corporate America and Wall Street that if you do the crime you will serve the time.
Most WorldCom investors will receive a pittance of their losses, probably two to five cents on the dollar from the class-action lawsuit. Other investors, notably those who had accounts at Salomon Smith Barney, WorldCom's lead underwriter, who have commenced NASD arbitrations for securities fraud and investment fraud against SSB could receive a significantly higher payoff if they are able to establish that SSB and their analyst Jack Grubman defrauded those investors.
The Ebbers sentence also send a message to Ken Lay and Jeff Skilling who are facing securities fraud charges in the Enron case at their January 2006 trial. If convicted, Lay and Skilling will likely receive a similarly long "life sentence."
The sentence given to Bernie Ebbers was the stiffest sentence ever for an investment fraud. Ebbers who is 63 years old will effectively be serving a life sentence for securities fraud.
I believe that the sentence is tough but fair and was necessary given the severity of the crime. Hopefully, the sentence will send the message to corporate America and Wall Street that if you do the crime you will serve the time.
Most WorldCom investors will receive a pittance of their losses, probably two to five cents on the dollar from the class-action lawsuit. Other investors, notably those who had accounts at Salomon Smith Barney, WorldCom's lead underwriter, who have commenced NASD arbitrations for securities fraud and investment fraud against SSB could receive a significantly higher payoff if they are able to establish that SSB and their analyst Jack Grubman defrauded those investors.
The Ebbers sentence also send a message to Ken Lay and Jeff Skilling who are facing securities fraud charges in the Enron case at their January 2006 trial. If convicted, Lay and Skilling will likely receive a similarly long "life sentence."
