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1. What factors in the WorldCom case support the conclusion that CEO Bernie Ebbers knew about...

1. What factors in the WorldCom case support the conclusion that CEO Bernie Ebbers knew about the financial statement fraud?

2. What factors support his defense that he did not know about the fraud? Briefly explain your answer.

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Answer #1
  1. In the WorldCom case, CEO Bernie Ebbers knew about the financial statement fraud because he was the one who encourage others to go into financial fraud because of the stock prices were going down, which was affecting his marginal loan. For that reason, he was trying to sell his stock, but the board of Directors lent him $341 million, along with 2% interest rate.
  2. The factors that support his defence that he did not know about the fraud is as he never sold his WorldCom stock, which was a showed that he was unaware of the fraud of fincial statements and accurate position of WorldCom.
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