Wall Street Journal :: At a time when WorldCom Inc. was sending tens of millions of dollars in investment-banking business to Salomon Smith Barney, the big Wall Street firm allocated nearly one million shares of coveted initial public offerings to Bernard Ebbers, the telecom company’s former chief executive.
New York Times reports that six other WorldCom executives or directors received the opportunity to buy thousands of shares as well. Among them was Scott D. Sullivan, the chief financial officer who oversaw the company’s books during the years when $7 billion in accounting misstatements were made.
Gretchen Morgenson goes on to report that Bernie the crook received 869,000 shares in 21 companies from 1996 to 2000. The largest allocation to Mr. Ebbers was 205,000 shares of Qwest Communications. Funny how the bandits stick together. In November 1999, Mr. Ebbers received 20,000 shares of KPNQwest, a European venture by Qwest. And the 10,000 shares of Juno Online Services that Mr. Ebbers received in May 1999 represented 1.1 percent of the shares the firm gave to its entire network of individual investor clients. Sanford C. Bernstein & Company, the brokerage firm, new stocks rose an average of 60 percent in their first day of trading. From 1986 to 1994, the average first-day move was 10 percent.