Risky Business

The following is a chronology of key events for WorldCom Inc., Adelphia, ImClone, Enron, and Arthur Andersen.
Oct. 22, 2001
Enron says U.S. Securities and Exchange Commission (SEC) is looking into a possible conflict of interest related to transactions between Enron and the Fastow partnerships. Two days later, Enron ousts Fastow.
Oct. 23, 2001
Under the direction of the chief auditor for Andersen's Enron account, David Duncan, the accounting company begins a two-week document destruction effort of Enron-related paperwork shortly after learning the Securities and Exchange Commission was asking Enron for accounting information. Duncan later tells congressional investigators the destruction of documents was ordered from higher up.
Nov. 8, 2001
As part of its investigation into Enron, the SEC subpoenas Andersen for Enron documents. Enron files documents with SEC saying it overstated earnings dating back to 1997 by almost $600 million. The next day, Enron agrees to a deal in which smaller rival Dynegy Inc.will buy Enron for some $9 billion in stock. As part of the deal, Chevron Texaco agrees to inject $1.5 billion in fresh capital immediately.
Nov. 9, 2001
The destruction of Enron documents ends when Duncan's assistant e-mails secretaries to "stop the shredding."
Nov. 28, 2001
Major credit rating agencies downgrade Enron's bonds to "junk" status. Dynegy terminates its agreement to buy Enron. Enron temporarily suspends all payments, other than those necessary to maintain core operations. Enron stock hits a new low of 70 cents amid the heaviest single-day trading volume ever for a NYSE or Nasdaq-listed stock.
Dec. 2, 2001
Enron files for Chapter 11 bankruptcy and hits Dynegy with a $10 billion breach of contract lawsuit. The following day, Enron fires 4,000 employees. Dynegy countersues for control of Enron's Northern Natural Gas Pipeline.
Dec. 4, 2001
Enron secures $1.5 billion in emergency financing, provided by major creditors J.P. Morgan Chase and Citigroup, so it can run a skeleton operation.
Dec. 12, 2001
Congressional hearings begin on Enron's collapse, while the company announces plans to raise up to $6 billion by selling assets. The next day, executives from accounting firm Andersen tell Congress they warned Enron about "possible illegal acts" after the energy trading giant failed to provide crucial data about it finances to Andersen.
Dec. 18, 2001

Tearful Enron employees and investors tell a congressional committee how they lost their life savings in the collapse. Enron Chief Executive Kenneth Lay scheduled to appear before the Senate Commerce Committee on Feb. 4.
Dec. 27, 2001
Martha Stewart, chairwoman and chief executive of her own multimedia company and a board member of the board of the NYSE, sells almost 4,000 shares of ImClone stock. The next day, the Food and Drug Administration announces that it will not consider Erbitux, ImClone's experimental cancer drug.
Jan. 9, 2002
The Justice Department opens a criminal investigation of Enron.
Jan. 10, 2002
Andersen admits its employees disposed of or deleted a number of documents relating to Enron's audit. President George W. Bush, who received major campaign contributions from Enron, orders government reviews of U.S. pension rules and corporate disclosure rules.
March 11, 2002
WorldCom receives a request for information from the U.S. Securities and Exchange Commission relating to accounting procedures and loans to officers.
March 27, 2002
With 5.7 million subscribers in 32 states and Puerto Rico, Adelphia discloses that the Rigas family had borrowed $2.3 billion through various family-owned partnerships. The debt had been kept off the company's balance sheet and the company says it may be liable for some of the debt. Adelphia's stock drops 18 percent.
March 28, 2002
Adelphia acknowledges that it may be liable for as much as $500 million in debt it guaranteed for Adelphia Business Solutions Inc.
April 1, 2002
Adelphia says in a Securities and Exchange Commission filing that it needs more time to review its accounting and will not meet the deadline for filing its annual 10-K financial statement. Stock closes at $13.12.
April 2, 2002
The first in a flurry of shareholder lawsuits accuses Adelphia of misleading stockholders by failing to disclose the off-balance-sheet debt, and alleges that a drop in the stock price was "in response to these negative announcements."
April 3, 2002
WorldCom says it is cutting 3,700 jobs in the U.S. or six percent of WorldCom group's staff, four percent of WorldCom's overall workforce. Adelphia says the SEC is conducting an informal inquiry into the off-the-books debt.
April 4, 2002
Adelphia announces it has hired three investment banks as financial advisers to explore possible cable asset sales and other ways to reduce debt.
April 17, 2002
Adelphia reveals that the SEC had opened a formal investigation into its accounting practices.
April 22, 2002
Standard & Poor's cuts WorldCom's long-term and short-term corporate credit ratings. The following day, Moody's Investors Service cuts WorldCom's long term ratings. Fitch cuts the company's ratings, saying it expects WorldCom's revenue to deteriorate during 2002, with prospects for recovery in 2003 uncertain.
April 30, 2002
WorldCom Chief Executive Officer Bernard Ebbers resigns amid slumping share price and SEC probe of the company's support of his personal loans. Vice Chairman John Sidgmore takes reins of company.
May 2, 2002
Adelphia says it expects to restate 1999, 2000 and 2001 financial results to show the off-the-books debt as liabilities.
May 8, 2002
Adelphia announces it is soliciting bids for cable systems in the Los Angeles area, Florida, Virginia and elsewhere in the Southeast (nearly half of its 5.7 million subscribers) to reduce debt.
May 9, 2002
Moody's cuts WorldCom's long term debt ratings to junk status, citing the company's deteriorating operating performance, debt and expectations for further weakness.
May 10, 2002
Standard & Poor's cuts WorldCom's credit rating to junk status.
May 13, 2002
Standard & Poor's removes WorldCom from its S&P 500 Index.
May 15, 2002
Rigas, 77, announces he is stepping down as chairman, president and chief executive officer. Erland E. Kailbourne, former chairman and CEO of Fleet National Bank's New York region and chairman of the Adelphia board's audit committee, is named chairman and interim chief executive officer. Nasdaq halts trading in Adelphia's stock, citing a need for "additional information."
May 16, 2002
Adelphia announces the resignation of its chief financial officer, Timothy J. Rigas. The following day, it discloses that federal grand juries in New York and central Pennsylvania are probing the company's finances.
May 21, 2002
WorldCom says it will scrap dividend payments and eliminate its two tracking stocks, one that reflects its main Internet and data business and a second that reflects its residential long-distance telephone business.
May 22, 2002
ImClone CEO Sam Waksal resigns and is replaced by his brother, Harlan.
May 23, 2002
At Adelphia, the Rigas family relinquishes control. John Rigas and sons Timothy, Michael and James resign as directors. Family agrees to turn over $1 billion in assets to help cover loans, over $567 million in cash flow from other cable companies the family owns, and to pledge all stock held by the family as collateral. Adelphia now estimates it is liable for $3.1 billion in family debts. Meanwhile, WorldCom secures $1.5 billion in new funding to replace a larger, $2 billion credit line.
May 24, 2002
Adelphia releases details showing that the Rigas family used the company's cash or assets to help it buy and operate the Sabres, expand personal cable company holdings, acquire timberland and invest in a golf course, and that many of the deals weren't approved by the board. The company said it was investigating the family's use of company jet airplanes, condominiums and apartments.
June 3, 2002
Adelphia's stock is dropped from Nasdaq and trades at 75 cents on the over-the-counter market.
June 5, 2002
WorldCom says it will exit the wireless resale business and will cut jobs to reduce expenses and pare massive debts.
June 6, 2002
Congressional investigators say they are looking into Martha Stewart's Dec. 27, 2001, sale of ImClone stock.
June 10, 2002
Adelphia says it would revise its subscriber count downward by more than 47,000 to 5.76 million. The company says it dismissed Deloitte & Touche as its accountant and is seeking a replacement.
June 12, 2002
Former ImClone CEO Sam Waksal is arrested on charges of insider trading for allegedly trying to sell his stock and tipping off family members after learning of the impending FDA decision.
June 14, 2002
Adelphia says it has hired the accounting firm PricewaterhouseCoopers. Adelphia says it fired 18 employees and that it is investigating why the company purchased a $700,000 membership at the exclusive Briar's Creek Golf Club in South Carolina in 2000, and whether it was business related or for personal use by the Rigas family.
June 17, 2002
Adelphia misses $96 million in bond interest and preferred stock dividend payments.
June 21, 2002
Adelphia reaches agreement with two banks for $1.5 billion in financing to continue operating while it reorganizes under Chapter 11 bankruptcy protection.
June 25, 2002
WorldCom fires its chief financial officer after uncovering improper accounting of some $4 billion in expenses which would have led the company to report a net loss for 2001 and the first quarter of 2002. The company also says it will cut 17,000 jobs, more than 20 percent of its workforce.
June 25, 2002
Adelphia files for bankruptcy.
June 26, 2002
Shares of Martha Stewart Living Omnimedia Inc. tumble more than 18 percent amid reports that Stewart may face a wider probe of her sale of ImClone shares. The Wall Street Journal reports that Douglas Faneuil, an assistant to Stewart's stockbroker, says he misled the brokerage firm's lawyers and the SEC when he supported the claim that Stewart and Peter Bacanovic had a prearranged sales agreement to dump the shares when they fell below $60.
June 28, 2002
The Wall Street Journal reports that a recent Xerox Corp. audit determined that the company improperly recorded more revenue in the past five years than federal regulators had estimated when they reached a settlement with the company in April. The SEC estimated in April that the company improperly listed $3 billion from 1997 through 2000.
Aug. 9, 2002
Global Crossing sells itself for $250 million to the same two Asian companies that tried to buy it for three times as much when it first filed for bankruptcy. A bankruptcy judge approves the agreement with Hutchison Whampoa and Singapore Technologies.
Aug. 28, 2002
Sullivan is indicted on securities fraud and other charges as prosecutors signal that other former executives are cooperating with their investigation. The indictment also names a new defendant, Buford Yates Jr., WorldCom's former director of general accounting, in the alleged scheme to artificially boost WorldCom's bottom line. (Myers is not indicted. He was charged along with Sullivan in the earlier criminal complaint, but has been negotiating with prosecutors.)
Sept. 12, 2002
The SEC accuses three former Tyco executives - CEO L. Dennis Kozlowski, former chief financial officer Mark H. Swartz, and former general counsel Mark A. Belnick - of failing to disclose tens of millions of dollars in low- or no-interest loans they took from the company. At the same time, New York prosecutors file criminal charges against the three men.
Sept. 23, 2002
Former Adelphia CEO John J. Rigas, his sons, Timothy and Michael; James R. Brown, former vice president of finance; and Michael C. Mulcahey, former director of internal reporting, are indicted on charges that include conspiracy, securities fraud and wire fraud.
Sept. 26, 2002
David Myers, WorldCom's former controller, agrees to cooperate with authorities against his former bosses and to plead guilty to conspiracy, securities fraud, and making false filings to the Securities and Exchange Commission. Myers, 44, faces up to 10 years on the most serious charge of filing false reports with the SEC.
Oct. 2, 2002
Michael Fastow, Enron's former CFO, is charged in connection with his role in the company's financial collapse. The charges against him include securities fraud, wire fraud, mail fraud, money laundering, and conspiracy. The criminal complaint alleges Fastow and others devised a scheme to defraud Enron and its shareholders through off-the-books partnerships, which made the company look more profitable than it was.
Oct. 2, 2002
Douglas Faneuil, an assistant to Martha Stewart's stockbroker, pleads guilty to a misdemeanor charge of receiving money and other valuables for keeping quiet about Stewart's sale of ImClone Systems Inc. shares last December. In exchange for stonewalling probers, Faneuil was offered an extra week of vacation and a free airline ticket and was given an increase in his commission rate, court papers said.
Oct. 3, 2002
Martha Stewart resigns from the board of directors of the New York Stock Exchange.
Oct. 7, 2002
Buford Yates Jr., 46, a lower-level employee who had been a minor player in the WorldCom case, pleads guilty to securities fraud and conspiracy as part of a deal to cooperate with investigators against his former bosses. Yates said he was instructed by supervisors to misreport expenses to increase Worldcom's reported net revenue by about $800 million.
Oct. 10, 2002
Betty Vinson, 47, WorldCom's former director of management reporting, enters her plea to charges of conspiracy to commit securities fraud and securities fraud in U.S. District Court in Manhattan. Vinson faces up to 10 years in prison on the most serious charge, securities fraud, but may get substantially less for providing testimony in the case.
Oct. 15, 2002
The ImClone insider trading scandal results in a guilty plea from ex-CEO Sam Waksal to charges of bank fraud and conspiracy. It is unclear whether information regarding the Martha Stewart investigation was offered as part of his plea. He tells the court that, "I am aware that my conduct, while I was in possession of material non-public information, was wrong."
Oct. 16, 2002
The maximum sentence allowed by law, five years of probation and a $500,000 fine, is handed down to former accounting giant Arthur Andersen for its role in the Enron scandal. There were no individual defendants in the trial, which accused Andersen of shredding Enron-related documents to thwart a government probe.
Oct. 17, 2002
Timothy Belden, the former head of trading in Enron's Portland, Ore., office, admits to one count of conspiracy to commit wire fraud and promises to cooperate with state and federal prosecutors as well as any non-criminal effort to investigate the energy industry.
Oct. 31, 2002
A federal grand jury indicts former Enron CFO Andrew Fastow on 78 counts, alleging he masterminded a scheme to artificially inflate the energy company's profits. The indictment, essentially a formal restatement of the earlier criminal complaint, is notable for the number of charges. If convicted, Fastow faces hundreds of years in jail and millions of dollars in fines.
Nov. 1, 2002
The U.S. government files a $548 million fraud and negligence lawsuit against accounting giant Ernst & Young in connection with the failure of a Chicago bank in 2001. The lawsuit, brought by the Federal Deposit Insurance Corp., accuses Ernst & Young of misstating Superior Bank's assets and deliberately delaying reporting of the error for fear it would hurt an $11 billion sale of the accounting firm's consulting arm.
Nov. 14, 2002
The New York Times prints emails in which ex-Citigroup analyst Jack Grubman boasts that he played the head of AT&T "like a fiddle," raising the company's rating in 1999 to help his boss win a power struggle and to get his daughter into an elite nursery school. Grubman says he was lying to boost his reputation.
Dec. 17, 2002
The former lead director of Tyco International Inc. pleads guilty to a felony for failing to tell his own board that the company paid him a $20 million finder's fee to broker the aquistion of a finance company. Frank E. Walsh agreed to repay the money plus pay a $2.5 million fine.
Feb. 25, 2003
Arrest warrants are issued for four former executives of Qwest Communications for fraud: Grant Graham, Thomas Hall, John Walker, and Bryan Treadway. They're accused of devising a scheme to create more than $33 million in revenue by wrongly reporting a purchase order with the Arizona School Facilities Board.
March 11, 2003
Samuel Waksal, the ImClone Systems founder at the center of an insider-trading scandal, agrees to an $800,000 fine and a lifetime ban on leading a public company. The deal is a partial settlement of civil charges filed against Waksal by the Securities and Exchange Commission. Waksal still faces up to 75 years in prison and fines on criminal charges related to the insider trading and tax evasion on $1.2 million sale of fine art.
April 16, 2003
The government files new bank fraud charges against former WorldCom CFO Scott Sullivan, accusing him of lying on financial statements to secure $4.25 billion in credit for the company. Sullivan already is charged with ordering WorldCom accountants to move operating expenses off the books, making the company appear profitable when it was losing money. He has pleaded innocent to the charges.
April 28, 2003
One of the largest penalties ever levied by securities regulators -- $14 billion -- is announced as part of the settlement to a lengthy investigation into allegations that Wall Street's biggest firms issued biased stock ratings to lure investment banking business. The agreement will change the way major investment firms - including Citigroup, Merrill Lynch and J.P. Morgan Chase - do business.
May 1, 2003
Former Enron Corp. chief financial officer Andrew Fastow faces 31 more charges and his wife and nine other former executives are indicted on a host of fraud, insider trading and other counts. Fastow now faces 109 charges. His wife, Lea Fastow, is charged with six counts, including money laundering conspiracy, filing false tax returns and conspiracy to commit wire fraud.
May 19, 2003
WorldCom agrees to a $500 million civil fraud settlement with the SEC. In the deal, which will set up a fund for victimized investors, the telecom neither admits nor denies charges it cooked its books. If approved by a judge it will be the largest fine ever levied by federal regulators, yet one criticized by some as a "slap on the wrist."
June 4, 2003
A federal grand jury returns a nine-count indictment on securities fraud, obstruction of justice and conspiracy charges against Martha Stewart and her broker, Peter Bacanovic. She pleaded innocent to all charges. Meanwhile, the SEC files a civil suit accusing her of insider trading and seeks to bar her from being in charge of any public company. Hours later, she resigns as chairwoman and CEO of Martha Stewart Living Omnimedia.
June 10, 2003
ImClone Systems founder Sam Waksal is sentenced to seven years and three months in prison for his role in the insider-trading scandal. He is also ordered to pay more than $4 million in fines and back taxes. Waksal makes an emotional courtroom apology to his family and former employees before the sentence is delivered.
June 17, 2003
Former Rite Aid Corp. chief executive officer Martin L. Grass agrees to plead guilty to two counts of conspiracy in a deal that calls for an eight-year prison sentence. The indictments allege that the meteoric increase in Rite Aid's stock price under the Grass's management in the late 1990s was accomplished by "massive accounting fraud, the deliberate falsification of financial statements, and intentionally false (SEC) filings."
July 7, 2003
A federal judge agrees to an increased settlement proposed by WorldCom and the SEC, adding $250 million worth of stock in the telecommunications company's new incarnation, MCI, to the already proposed $500 million. Anticipating criticism that the penalty is still too light, the judge said he did not want to drive the beleaguered company out of business. If it does not emerge from bankruptcy proceedings, the penalty will remain $500 million.
July 23, 2003
ImClone Systems Inc. founder Sam Waksal arrives at a minimum-security prison about 75 miles from Philadelphia to begin serving a prison sentence of more than seven years. "I deeply regret the mistakes I've made that have brought me here today," Waksal said after arriving at the Schuylkill Federal Correctional Institution in style — a Range Rover — but dressed comfortably in blue jeans, white sneakers and a blazer.
Aug. 27, 2003
The Oklahoma attorney general files the first criminal charges against former WorldCom Inc. chief Bernard Ebbers, part of a wider complaint that also names the telecommunications company -- now known as MCI -- and other one-time top executives. The complaint alleges they schemed to defraud investors in Oklahoma by understating company expenses and overstating income in 2000.
Sept. 3, 2003
Ebbers is booked on charges of violating Oklahoma securities laws. The Oklahoma attorney general says false information on company documents led to investors losing millions, including a $64 million hit taken by state pension funds invested in the company. Oklahoma's effort to prosecute Ebbers has vexed federal agencies, which worry that the state's case could undermine their own pursuit of the company over massive accounting fraud.
Sept. 17, 2003
Three former Merrill Lynch executives, Daniel Bayly, Robert Furst and James Brown, are charged with fraud for allegedly helping Enron Corp. inflate earnings with a loan the energy trader disguised as a sale. The charges stem from a scheme in which Enron, with Merrill's knowledge, allegedly booked a short-term investment from the brokerage firm as profit from the sale of Nigerian barges. The income was then used to make Enron appear to have met earnings targets.
Jan. 8, 2004
A federal judge tentatively accepts a plea agreement for Lea Fastow, the wife of former Enron Corp. finance chief Andrew S. Fastow, a move that could lead to a plea from Fastow and possibly his cooperation in the investigation of other top executives in the the energy giant's collapse. Under the deal, Lea Fastow, a former assistant treasurer at Enron, would go to prison for five months.
Feb. 19, 2004
Jeffrey Skilling, 50, the former Enron Corp. chief executive who resigned less than four months before the company shattered in scandal, surrenders to face expected criminal charges related to the company's collapse. Skilling, flanked by a pair of attorneys, turned himself in at the Houston FBI offices just before daybreak.
March 2, 2004
A federal indictment accuses former Worldcom CEO Bernard Ebbers with conspiracy to commit securities fraud, securities fraud and falsely filing with the Securities and Exchange Commission. Former CFO Scott Sullivan, already facing the same charges, pleads guilty and agrees to testify against his former boss.
March 5, 2004
A state court judge throws out one of the most serious charges -- the enterprise corruption charge -- against L. Dennis Kozlowski, 57, and Mark Swartz, 43, respectively the former chief executive and chief financial officers of Tyco International. The two are still charged with grand larceny, falsifying business records and violating state business laws.
April 20, 2004
WorldCom Inc. emerges from bankruptcy as MCI, shedding its scandal-tainted name and more than $35 billion in debt. All the senior executives and board members from the reign of former Chief Executive Officer Bernard Ebbers are gone, and the company said it lost none of its top 100 customers during the bankruptcy process.
July 7, 2004
Two-and-a-half years after the federal government launched its painstaking investigation into Enron's financial dealings, a grand jury hands down an 11-count indictment against former chairman and CEO Kenneth Lay. Lay is the 30th and highest-profile individual charged in the collapse. He pleads innocent to the charges in a court appearance the next day.
July 8, 2004
Adelphia cable company founder John Rigas and his son Timothy are convicted of conspiracy, bank fraud and securities fraud for looting Adelphia and duping its investors. Another Rigas son, Michael, is acquitted of conspiracy charges and the jury is undecided on remaining counts against him.
March 15, 2005
Former WorldCom CEO Bernard Ebbers is convicted of federal fraud and conspiracy charges for his part in one of the largest accounting frauds in U.S. history, now estimated at $11 billion. The crimes carry up to 85 years in prison. His lawyer says an appeal is planned.
May 31, 2005
The Supreme Court unanimously overturns Arthur Andersen's conviction for destroying Enron Corp.-related documents before the company's collapse. The decision says jury instructions at the trial - which virtually destroyed Andersen - were too vague and broad.
June 17, 2005
Following a four-month retrial, former Tyco CEO Dennis Kozlowski and executive Mark H. Swartz are convicted of grand larceny, falsifying business records, securities fraud and other charges in connection with looting their company out of more than $600 million. The pair had testified they were unaware their actions were wrong.
July 13, 2005
Three years after WorldCom's collapse, former CEO Bernard Ebbers is sentenced to 25 years in prison. Judge Barbara Jones declines to consider his heart condition as a factor, and says, "I find that a sentence of anything less would not reflect the seriousness of this crime." She says she will recommend Ebbers be designated to the federal prison in Yazoo City, Miss., close to his home.
May 25, 2006
On the sixth day of deliberations, a verdict is reached in the Houston trial of former Enron chiefs Kenneth Lay and Jeffrey Skilling. Lay is convicted of all six counts against him, including conspiracy to commit securities and wire fraud. Skilling is convicted of conspiracy to commit securities and wire fraud. Sentencing is set for Sept. 11.
July 5, 2006
Kenneth Lay, Enron's founder and vilified former chairman, dies of a heart attack. He was 64.
Aug. 7, 2006
The SEC reaches an agreement to settle insider trading charges against Martha Stewart and Peter Bacanovic relating to Stewart's sale of ImClone Systems stock in Dec. 2001. Stewart agrees to an injunction, disgorgement of losses she avoided, and the maximum penalty of three times those losses, for a total of about $195,000. Bacanovic agrees to an injunction and to pay disgorgement of commissions and a penalty totaling approximately $75,000.
Sept. 22, 2006
Hewlett-Packard Co. Chairwoman Patricia Dunn resigns amid scandal over HP boardroom spying. She steps down amid an uproar over the spying campaign on directors and reporters that prompted the resignation of two other board members and the departure of three top HP employees. California's Attorney General has said he has enough evidence to charge people in the probe, and the FBI and a congressional panel are also investigating.