All told, the total value of WorldCom’s accounting fraud was later estimated at nearly $80 billion . The bankrupt company later agreed to pay a $2.25 billion civil penalty to the SEC, which effectively took control of WorldCom by consent decree in 2003. In 2006, Bernie Ebbers was sentenced to 25 years in a Louisiana prison for his role in the fraud, and he will be ineligible for parole until 2028, when he will be 87 years old. Verizon Communications Inc. (NYSE:VZ) purchased what remained of WorldCom for $6.7 billion in 2006, and it now serves as Verizon Communications Inc. (NYSE:VZ)’s business telephony division.
Connecting East and West
The Trans-Siberian Railway was officially completed on July 21, 1904. Conceived in the 1870s, the plan for a rail link across the vast Russian nation almost stalled after the assassination of Czar Alexander II, its prime advocate. Restarted in 1886, the railway’s construction got under way in 1891, and for over a decade laborers battled landslides, armed bandits, disease, and the occasional tiger attack to connect the Eastern and Western ends of Russia. When completed, its primary line, from Moscow to Vladivostok, became the longest continuous railway in the world at more than 5,700 miles. Two longer lines have since been built, but both rely on the Trans-Siberian’s original tracks for much of their routes.
Down goes the Dow
On July 21, 1933, one day after its wildest day in years, the Dow Jones Industrial Average (Dow Jones Indices:.DJI) fell by 7.8%, dismaying bulls who had been expecting a rebound. Volume, at 9.6 million shares , was the fourth-highest in the history of the New York Stock Exchange and the largest since the massive rally that followed Black Monday and Black Tuesday in 1929, but no one really had an answer as to why such a violent stampede took place. Panicky European investors were blamed, as were the same old saws of the previous day — margin calls, a wholesale reevaluation of the speculative “liquor stocks,” and the fear of a regulatory noose that might soon tighten around Wall Street.
President Franklin D. Roosevelt’s administration said that no action would be taken in response to the two-day drop. The Los Angeles Times reported:
In official quarters the opinion was expressed that if speculators and investors are sully enough to bid up stocks far above their value they are very apt to lose their money. In official quarters, the view was expressed that many people attach undue importance to fluctuations in stock prices.
Two days of heavy losses had shaved nearly 15% off of the Dow Jones Industrial Average (Dow Jones Indices:.DJI), but this proved to be a rather short-lived correction. The bull market that had begun a year earlier, but which had really kicked in following Roosevelt’s inauguration, would continue until 1937, tacking another 120% of gains onto the Dow Jones Industrial Average (Dow Jones Indices:.DJI) from the end of July 21, 1933.
The article The $100 Billion Bankruptcy originally appeared on Fool.com and is written by Alex Planes.
Fool contributor Alex Planes and The Motley Fool have no position in any stocks mentioned.
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