Presented below is abbreviated testimony from Troy Normand in the WorldCom case.
ID: 2470371 • Letter: P
Question
Presented below is abbreviated testimony from Troy Normand in the WorldCom case. He was a manager in the corporate reporting department and is one of five individuals who pleaded guilty. He is testifying in hopes of receiving no prison time when he is ultimately sentenced.
Q. Mr. Normand, if you could just describe for the jury how the meeting started and what was said during the meeting?
A. I can't recall exactly who initiated the discussion, but right away Scott Sullivan acknowledged that he was aware we had Problems with the entries, David Myers had informed him, and we were considering resigning. He said that he respected our concerns but that we weren't being asked to do anything that he believed was wrong. He mentioned that he acknowledged that the company had lost focus quite a bit due to the preparations for the Sprint merger, and that he was putting plans in place and projects in place to try to determine where the Problems were, why the costs were so high. He did say he believed that the initial statements that we produced, that the line costs in those statements could not have been as high as they were, that he believed something was wrong and there was no way that the costs were that high. I informed him that I didn't believe the entry we were being asked to do was right, that I was scared, and I didn't want to put myself in a position of going to jail for him or the company. He responded that he didn't believe anything was wrong, nobody was going to be going to jail, but that if it later was found to be wrong, that he would be the person going to jail, not me. He asked that I stay, don't jump off the plane, let him land it softly, that's basically how he put it. And he mentioned that he had a discussion with Bernie Ebbers, asking Bernie to reduce projections going forward and that Bernie had refused.
Q. Mr. Normand, you said that Mr. Sullivan said something about don't jump out of the plane. What did you understand him to mean when he said that?
A. Not to quit.
Q. During this meeting, did Mr. Sullivan say anything about whether you would be asked to make entries like this in the future?
A. Yes, he made a comment that from that point going forward we wouldn't be asked to record any entries, high-level late adjustments, that the numbers would be the numbers.
Q. What did you understand that to be mean, the numbers would be the numbers ?
A. That after the preliminary statements were issued, with the exception of any normal transaction, valid transaction, we wouldn't be asked to be recording any more late entires.
Q. I believe you testified that Mr. Sullivan said something about the line cost numbers not being accurate. Did he ask you to conduct any analysis to determine whether the line cost numbers were accurate?
A. No, he did not.
Q. Did anyone ever ask you to do that?
A. No.
Q. Did you ever conduct any such analysis?
A. No, I didn't.
Q. During this meeting, did Mr. Sullivan ever provide any accounting justification for the entry you were asked to make?
A. No, he did not.
Q. Did anything else happen during the meeting?
A. I don't recall anything else.
Q. How did you feel after this meeting?
A. Not much better actually. I left his office not convinced in any way that what we were asked to do was right. However, I did question myself to some degree after talking with him wondering whether I was making something more out of what was really there.
(a)
What appears to be the ethical issue involved in this case?
(b)
Is Troy Normand acting improperly or immorally?
(c)
What would you do if you were Troy Normand? In your response, please identify alternative courses of action Troy Normand could have taken and the possible trade-offs Troy Normand would face under the alternatives given.
(d)
Who are the major stakeholders in this case? In your response, please discuss how the major stakeholders would be affected by the alternative courses of action suggested in (c) above.
(a)
What appears to be the ethical issue involved in this case?
(b)
Is Troy Normand acting improperly or immorally?
(c)
What would you do if you were Troy Normand? In your response, please identify alternative courses of action Troy Normand could have taken and the possible trade-offs Troy Normand would face under the alternatives given.
(d)
Who are the major stakeholders in this case? In your response, please discuss how the major stakeholders would be affected by the alternative courses of action suggested in (c) above.
Explanation / Answer
Ans A) Here It happens to be Fundamental ethical issues, wherein company should be running its business with utmost integrity and clarity.
Ans B) Troy is acting as immorally, since he knew about the wrong things happening in the bussiness and did not raise his voice to the appropriate authority rather than spoke to his boss ( Scott Sullivon) and did not do any thing with the assurance that he will not be sent to Jail.
Ans C) I would have firstly double checked the record and entries to see if these entries are really true or bogus. After that I would have done an analysis and tried to make a connection with whom it is coming from and all, I would have told this to board of directors and would have made them all aware about the current situations of the company.
Ans D) The major stakeholders are in this case are the equity holders, creditors, government and employees. If the above course of action would have been taken the board of directors would have taken the right decision, they might would have sacked the employees involved in this book booking, company shares would have not be fallen and the correct steps of action would have been atken at the right time by the right people. Entire stake holders loss can be mitiated.
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