r
r
r
July 31, 2002 — (WEB HOST INDUSTRY REVIEW) — The US Senate reportedly leveled criticisms at the leaders of the three major telecommunications companies under investigation for fraud, concerning executives who cashed out millions in stock while hiding their companies? financial conditions from the public.
r
r
r
r
At the same time, President Bush signed a government crackdown on business fraud, a bill that was propelled quickly through Congress by tumbling stock markets and disappearing investor confidence.
r
r
r
r
During a hearing with the leaders of WorldCom, Global Crossing and Qwest Communications, Arizona Senator John McCain reportedly pointed out the millions in stock options given to executives who cashed them in before the companies collapsed.
r
r
r
r
McCain criticized the fact that the new law does not require companies to file as an expense against earnings the valuable stock options given to top executives. Many experts believe that change to be necessary, including Federal Reserve chairman Alan Greenspan.
r
r
r
r
Leaders from the three companies, as well as Federal Communications Commission chairman Michael Powell, testified on Tuesday that they did not expect major disruptions in phone or Internet service as a result of the financial problems experienced by the carriers.
r
r
r
r
Global Crossing filed for bankruptcy in January, while WorldCom followed with the biggest bankruptcy in history earlier this month. Qwest admitted to major accounting misstatements of its own on Sunday.
r
r
r
r
WorldCom is currently under investigation by both the Justice Department and the Securities Exchange Commission, which filed civil fraud charges against the company. WorldCom disclosed earlier in the month that it had improperly accounted for nearly $4 billion in expenses over the past two years.
r
r
r
r
Global Crossing has acknowledged that documents were shredded before and after it filed for bankruptcy and was notified in February of a federal accounting investigation.
r
r
r
r
Qwest is being investigated by the SEC and the Justice department for its swaps of fiber-optic capacity. It?s government contracts are being reviewed by the General Services Administration.
