Verizon Wireless

Verizon stars with WorldCom in 1983 when Murray Waldron and William Rector came together to sketch out a plan create a long-distance telephone service. Long Distance Discount service, became their new company that began operating as a long-distance reseller in 1984. The new company grew quickly in the next fifteen years, over time it change to WorldCom. The company became one of the largest telecommunications corporations in the world. They also became the largest bankruptcy filing in U. S. history and another big name on the list of disgraced by the accounting scandals.

They recorded $ 3. 8 billion in capital expenditures profit in 2001and the first quarter of 2002. They continued to buy company stock when they wasn’t supposed to, which led to the unawareness of fraud that by doing this led to the stock’s price. In 1999, internal investigations discovered questionable accounting practices. CEO Ebber received a controversial $408 million loan to secure by the company stock. WorldCom signed a credit agreement with multiply banks to borrow 2. 65 billion that they will repay back within a year, in July 2001.

The Securities and Exchange Commission made WorldCom to detail the fact s of underlying the events that happen in June 2002. A meeting was held between the board’s audit committee and Anderson; he assessed WorldCom’s accounting practices to determine they had control to prevent material errors in its financial statements. WorldCom was taking expenses that should have directly attributed to the balance sheet and attribute them to specific assets. They making look like they had no decrease in asset, no decrease in net income, and was hiding the expense. WorldCom in end up going in debt for 7.

7 billion, that why they filed for chapter 11bankruptcy protection on July 21, 2002. The firm listed $107 billion in assists and $41 billion in debt, in the bankruptcy filing. In July 2005, CEO Ebbers was sentenced to twenty-five years in a federal prison in Mississippi. This was the toughest sentence given in corporate scandals. Also Sullivan the finance CEO received five year in prison, Myers the controller received one year and one day in prison, Yates the accounting received one year and a day in prison, Vinson the accounting manager received five months in prison, and Normand the accounting received three years probation.

In 2005, MCI Inc. board members accepted an offer from Verizon Communications Inc. That valued at $6. 6 billion to $6. 8 billion. The Verizon deal, which was less than Qwest’s $7. 3 billion offer, includes a break up payment to MCI shareholders. The IP-Relay department has been purchased from MCI by a company called VCustomer. According to a VCustomer press release, the deal is worth about $45 million. As this represents 0. 25% of MCI’s 2004 annual revenue, it does not seem like a very significant change to MCI.

On February 14, 2005, Verizon agreed to acquire MCI, WorldCom, after SBC Communications agreed to acquire AT&T Corp. just a couple weeks earlier. The media coverage has focused on several ways in which that once completed, way it would benefit Verizon, including economies of scale from a potential productivity boost to be accomplish via the elimination of many of jobs at the combined company, and access to the large base of business customers currently served by MCI. The real benefit to Verizon was the long-haul lines. Verizon’s business is concentrated in the eastern United States.

The company is effectively a regional phone company, but they forces it to pay usage fees to long-haul carriers, such as former MCI, to complete calls for its customers when their calls go outside the Verizon known as “footprint”. That need by the MCI acquisition and was a big key long term market position strategy. By January 6, 2006, MCI was put into Verizon with the name Verizon Business. Verizon also acquired the naming rights to D. C. home of the Washington Wizards and the Washington Capitals, the Verizon Center (formerly known as the MCI Center).

Just prior to the acquisition, MCI had brought an internet services company, which is known as Totality. Verizon and MCI put together, was the largest telecommunications company in the United States based on sales of $75. 11 billion, profits of $7. 4 billion and assets of $168. 13 billion. In 2006, arose big when USA Today spoke out that Verizon, along with AT&T Inc. and BellSouth, had turned over the call records of millions of U. S. citizens to the National Security Agency. Verizon denied turning over records to the government, but did not comment on whether MCI.

On October of 2007 the company admitted in a letter to the United States House Committee on Energy and Commerce that it had gave customer information to the FBI and other federal agencies of the U. S. government about 94,000 times from January 2005 to September 2007. They also provided information 720 times without being presented with a court order or warrant. In September 2007, Verizon Wireless did refuse to make their mobile phone network available to NARAL Pro-Choice America for a program which allows people to sign up for pro-choice text messages.

They subsequently change the decision, saying “It was an incorrect interpretation of a dusty internal policy that … was designed to ward against communications such as anonymous hate messaging and adult materials sent to children. ” and that Verizon has “great respect for this free flow of ideas. ” The 2008 sale of landline operations in Northern New England to FairPoint Communications brought up questions. The parties had to work with the governments of Maine, New Hampshire and Vermont to ensure the sale was process. The ethical dilemma was the cutting edge bookkeeping and the accounting fraud.

Ignorance was one of the problems because they were continuing to buy stock company’s stock, which accelerated the stock’s price and unaware of the fraud involved. The company had borrowed money which put them in debt with the banks. I would be ethical by keeping the company on a legal track. Even after, I would fix my mistakes before it got out of control. The is they could have fix it, but they choose not to which was not ethical. At the end of the day is not worth it. Five of the main employee lost their freedom for their wrong doing. Annotated Bibliography Yuki Noguchi. WashingtonPost. “Verizon Beats Out Quest In Battle To Acquire MCI.

” Studies of 2005. http//www. washingtonpost. com/wp-dyn/articles/A22085-2005Feb13. html Summary: This article was about new settlement of Verizon cutting deal in 2005. Wikipedia. “Talk: MCI Inc. ” Studies of 2005. http:en. wikipedia. org/wiki/Talk:MCI Summary: This article is about LDDS, which later changed its name to WorldCom and purchased MCI Communications. The current MCI article has a bankruptcy (WorldCom) slant, reflecting the facts of WorldCom purchased MCI. Since the scandal, the MCI heritage has overshadowed the WorldCom heritage. BR staff writer. “Verizon closes MCI acquisition” Studies of 2005.

http//www. cbronline. com/article_news. Summary: Verizon Communications Inc, has closed its $8. 6bn acquisition of the second largest US long-distance telephone provider MCI Inc. MCI CEO Michael Capellas decides to leave the business. Ferrell,O. C and Linda,Fraedrich,John. “Bussiness Ethics-Ethical Decision Making and Cases. ”Copyright 2008: Seventh Edition, Case 6. Houghton Mifflin Company, Boston and NewYork. 4/9/09. Summary: The book talked every part of Verizon’s history. They talked about all the wrong doing and the bankruptcy. They broke down company profits and the led to the company downfall.