By now everyone knows that ex-WorldCom CEO Bernie Ebbers was found guilty on Tuesday of securities fraud, conspiracy and filing false documents with regulators. The 63 year old could get 30 years in prison for toppling WorldCom and causing the company to file the largest bankruptcy in U.S. history.
Jurors didn't have any tangible evidence that helped them deliver a guilty verdict. No e-mail trails. No phone messages. No handwritten notes or memos. Ebbers maintained that the financial wrongdoings were masterminded by Scott Sullivan, WorldCom's chief finacial officer, and the fed's star witness.
What it did come down to, notes an article in today's LA Times (registration required), is that jurors refused to believe that a CEO who nurtured a small phone company into a gigantic global telecom player could have been ignorant of the financial tampering.
As Daniel J. Callahan put it in the LATimes piece: "When you start a company...and you bring it up from nothing, it's hard to convince a jury that you are just too stupid to know what's going on."
It is very far-fetched that Ebbers' argument of ignorance would have exonerated him. In his defense, his lawyers offered that Ebbers had no "financial acumen" and delegated accounting responsbilities to Sullivan, but isn't it a CEO's responsibility to understand the business's finances even if he's not directly managing the numbers? Or is really possible that Ebbers didn't recognize the "cooking of the books" by Sullivan?