On December 10, 2002, the court transferred the case to the U.S. District Court for the Southern District of New York, case number 02-CV-9515. According to docket 02-CV-9515, the lead case number is 02-CV-3288.
According to a Press Release dated July 22, 2002, the Complaint alleges that during the Class Period, defendants materially misled the investing public, thereby inflating the price of WorldCom Notes, by publicly issuing false and misleading statements and omitting to disclose material facts necessary to make defendants' statements not false and misleading. Said statements and omissions were materially false and misleading
in that they failed to disclose material adverse information and misrepresented the truth about the Company, its business and operations.
The Complaint further alleges that each of the Company's reported earnings
announcements throughout the Class Period were false and misleading for a
plethora of reasons. During the Class Period, the Company improperly booked approximately $3.8 billion in expenses as capital expenditures, a device that permitted the Company to misleadingly enhance profits and cash flow. These bookings include $3.06 billion in 2001 and $797 million in the first quarter of 2002. The accounting machination raised cash flow because it improperly labeled costs as an asset that could be written down over time, not directly. Shifting certain transfers from line item expenses to capital accounts is an egregious breach of Generally Accepted Accounting Principles and Generally Accepted Accounting Standards. Without utilizing this improper accounting practice, the Company would have reported a net loss for 2001, and the first quarter of 2002. WorldCom reported a profit of $1.4 billion for 2001 and $130 million for the first quarter of 2002, each entirely false.