Washington, D.C., June 14, 2007 – LAWFUEL – The Law Newswire – The Securities and Exchange Commission announced today that distributions from its Fair Fund to investor victims of the WorldCom, Inc. accounting fraud have surpassed $500 million.
“The distribution of over a half-billion dollars through the SEC’s WorldCom Fair Fund marks an important milestone in our successful program to return monies to injured investors,” said SEC Chairman Christopher Cox. “In the last four years, through this and other SEC distributions, the Commission has returned nearly $2 billion to investor victims. I anticipate substantial additional distributions to investors in the near future.”
Richard C. Breeden, the SEC’s distribution agent for the Fair Fund, has advised the agency that he expects the remaining $250 million from the original $750 million penalty obtained in a settlement with the company to be distributed later this year upon final resolution by the Court of any contested claims. The WorldCom Fair Fund has been under the oversight of the Honorable Jed S. Rakoff of the U.S. District Court for the Southern District of New York.
Peter H. Bresnan, Deputy Director the SEC’s Division of Enforcement, said, “We are pleased that investors defrauded by WorldCom have received over a half-billion dollars from our Fair Fund. The distribution is an important chapter in our enforcement efforts against WorldCom and the individuals at the center of the massive fraud at that company.”
The WorldCom Fair Fund distribution was made pursuant to Section 308 of the Sarbanes-Oxley Act of 2002, which gave the SEC the ability to seek court approval to distribute civil money penalties along with disgorgement to victims of securities fraud. By law prior to 2002, all civil penalties obtained by the SEC in securities enforcement actions were deposited in the general fund of the U.S. Treasury.
The Commission sued WorldCom on June 26, 2002, the day after the company disclosed it had made misstatements on its financial statements for the preceding five fiscal quarters. In July 2003, the District Court entered a final judgment ordering WorldCom to pay a civil penalty. Pursuant to the Commission’s request, this penalty was placed in a Fair Fund for the benefit of WorldCom’s investor victims.
Questions regarding the WorldCom Fair Fund distribution may be directed to Richard Breeden, the fund’s administrator, at WorldCom Victim Trust, P.O. Box 6979, Syracuse, NY 13217, or at www.worldcomvictimtrust.com.List your legal jobs on the LawFuel Network