Trust Updates Archive
(August 5, 2005--Chicago, IL)--"One last extension" for the filing of claims under the WorldCom Victim Trust was announced this afternoon by the distribution agent, Breeden & Company. Claims must be received no later than the close of business on Monday, September 12. The American Bankers Association has been lobbying to extend the deadline because of problems that custodian banks have encountered.
The WorldCom Victim Trust was established as part of the settlement in SEC v. WorldCom. On June 26, 2002, the Securities and Exchange Commission filed civil charges against WorldCom in federal court alleging that the company violated antifraud and reporting requirements by overstating its reported earnings by some $3 billion in 2001 and $800 million during the first quarter of 2002. The July 2003 settlement between WorldCom and the SEC consisted of $500 million in cash and 10 million shares of common stock of MCI. In accordance with the Sarbanes-Oxley Act of 2002, the SEC is applying the proceeds to compensate investor victims of corporate fraud. The distribution will be through the WorldCom Victim Trust which is being administered by former SEC chairman Richard Breeden.
Custodian banks have been experiencing difficulties in compiling data, according to the American Bankers Association. In particular, difficulties revolve around "the need to match trades during the fraud period and the lack of tax-lot accounting records," says an ABA spokeswoman. Without this data, banks cannot determine a claimant's potential eligibility.
In addition to the extension, the Trust will accept raw electronic transaction data in "suitable" formats from custodian banks. To submit data electronically call Marc Schneider or Paul Joslyn at 315-251-6065. However, Breeden prefers that bank claimants match buys and sells. He has proposed that the required claimant certification be at the back end of the process, that is, after the bank has received notice of the their eligible claim.
To be eligible for compensation, a claimant must have been a holder of WorldCom securities on June 25, 2002. Additionally, claimants must have purchased securities between April 29, 1999 and June 25, 2002 and must have incurred a net loss on any securities sales during that period. For purposes of determining the net loss, claimants can include WorlCom securities sold during the eligibility period, but purchased prior to April 29, 1999. For more information on eligibility go to http://www.worldcomvictimtrust.com/default.asp.
SEC v. WorldCom, No. 02-4963 (S.D.N.Y.)
-- Copyright ©2005 A.M. Publishing, Inc., Trust Regulatory News
No statement in this issue is offered as or should
To subscribe to Trust Regulatory News
send your request to firstname.lastname@example.org
or call 800-404-2116.