(Xinhua via NewsEdge) Thousands of investors harmed by WorldCom's $11-billion accounting fraud will soon receive their share of as much as $150 million in the first installment of payments from a special fund, The Washington Post reported.
WorldCom, which collapsed into bankruptcy in 2002, agreed in a settlement with the Securities and Exchange Commission the following year to pay a $750-million penalty, a small sum compared with the tens of billions of dollars of market value that evaporated in one of the largest corporate frauds in US history.
The settlement money went into a special fund for aggrieved investors from a number of corporate accounting failures when the telecom company emerged from Chapter 11 bankruptcy protection in April 2004 under the name MCI Inc. Verizon Communications later bought MCI.
People in 110 countries have made nearly 450,000 claims for restitution in the WorldCom distribution process, the SEC was quoted as saying.
A federal appeals court ruled early this month that the SEC had the authority to decide how to distribute the $750 million to investors who held WorldCom stock or bonds from April 1999 through the company's bankruptcy proceedings.
The special fund for investors, known as the Fair Fund, was established under the 2002 Sarbanes-Oxley anti-fraud law that was enacted in response to the wave of corporate scandals.
© 2006 Xinhua News Agency
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