1. WorldCom Update: Former Execs Refuse to Testify
WorldCom’s former CEO Bernard Ebbers and its former CFO, Scott Sullivan have invoked the Fifth Amendment as the basis for refusing to testify at a hearing yesterday conducted by the U.S. House Financial Services Committee. During the hearing, all others subpoenaed, including WorldCom’s current chairman, WorldCom’s current CEO, Salomon’s Jack Grubman, and Arthur Andersen’s Melvin Dick, claimed to have no knowledge of the accounting fraud prior to Cynthia Cooper’s discovery last month.
The committee is investigating Grubman’s participation in the scandal based on his move to downgrade WorldCom’s stock to underperforming on June 21, prior to the fraud being made public on June 25. In addition, Salomon is being questioned about an email from a different party in the trading firm issued to Sullivan on June 24. The email inquired about a rumor that WorldCom has misappropriated $3 billion.
Speculation that Ebbers had knowledge of the accounting fraud has been heightened upon news that the WorldCom founder proposed, just before a forced resignation, that the budget for company’s internal audit unit be cut in half.
In other developments, WorldCom has filed a lawsuit against Sullivan, demanding that he return a $10 million bonus that he received last year. According to the company, revelations about Sullivan’s performance indicate that he was not eligible for the bonus.
3. Comstor to Resell Polycom’s IP Phones
Comstor will resell Polycom’s SoundPoint IP 500CS IP desktop phone, which is interoperable with Cisco CallManager, and its SoundStation IP 3000, a 3Com NBX conference phone. Comstor has already been distributing Polycom’s gear, but, for the first time, it is adding the company’s VoIP phones to its product line.
5. Singtel to Use Digiquant for VoIP Billing
Singtel has deployed Digiquant’s Internet Management System