Billion dollars for WorldCom investors

WASHINGTON - Thousands of defrauded WorldCom investors will soon start receiving money from a US$750 million ($1.12 billion) fund set up to compensate them, the chairman of the US Securities and Exchange Commission said.

"The distribution will begin immediately," SEC's Christopher Cox said. In 2002, the SEC brought civil charges against the former telco after a massive accounting scandal.

A court overseeing the litigation has cleared a first wave of payments up to US$150 million or about 20 per cent of the SEC's "Fair Fund".

There were nearly 450,000 claims in 10 languages against the first instalment, Cox said. The remaining US$600 million in the fund will be distributed as claims get processed, he said.

WorldCom emerged from bankruptcy protection in 2004 as MCI, a long-distance telco that was subsequently acquired by Verizon.

WorldCom was assembled during the 1990s telco boom through takeovers by its former chief executive Bernard Ebbers. Ebbers was later convicted of orchestrating an US$11 billion fraud and sentenced to 25 years in prison.

- REUTERS