In June 2002, Cynthia F. Cooper blew the whistle on the largest corporate fraud in history.
Cooper discovered the harsh reality of WorldCom's financial practices. The Company, based in Clinton , Miss. , had been classifying operating costs as capital expenditures, thereby inflating its profits.
Cynthia Cooper went to the auditing committee of WorldCom's board in June 2002 and told them that the company had been using suspect accounting practices.
Within days, the board fired WorldCom's chief financial officer (CFO), Scott Sullivan.
WorldCom eventually disclosed that it inflated profits for more than a year by improperly accounting for more than $3.9 billion US. Meaning it transferred routine expenses to capital expenditures, making its earnings appear larger than they actually were. WorldCom then laid off 17,000 workers within a week.
WorldCom shares drop from $64.50 in 1999 to 20 cents in 2002.
In 2004 Bernard Ebbers, WorldCom's CEO pleaded not guilty to charges of fraud and conspiracy in connection with an $11-billion US fraud at WorldCom.
In early 2005 Ebbers was found guilty by a federal jury of fraud, conspiracy, and filing false documents with regulators. He is facing up to 85 years in prison.
Cooper says exposing WorldCom's fraud was "the most difficult thing I've ever been through in my life. Sometimes," she adds, "doing the right thing has a cost, and that cost can be severe.
After leaving WorldCom, Cooper formed Cynthia Cooper Consulting and started speaking to corporations, associations, and universities about ethics and leadership. She continues providing advice on corporate ethics, to corporations and business schools throughout North America .
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