Bankruptcy court approves MCI settlement with SEC

Bankruptcy court approves MCI settlement with SEC

MCI has won approval for its settlement with the US Securities and Exchange Commission (SEC) from the court overseeing its bankruptcy case.

The US Bankruptcy Court for the Southern District of New York approved the settlement, under which victims of MCI's fraud are to receive $US500 million in cash and $US250 million in shares, MCI said.

The ruling resolves all claims by the SEC against MCI, still legally called WorldCom, for its past accounting practices, the company said.

Shareholders, bondholders and other victims would get the settlement proceeds when MCI emerges from Chapter 11 bankruptcy protection, the Ashburn, Virginia, telecommunications company said.

The SEC's legal proceedings against MCI began in June last year. It filed fraud charges the day after the company said it would restate earnings for five consecutive quarters ending with first quarter of 2002, due to accounting irregularities.

MCI later admitted, by stages, to further accounting irregularities totaling more than $US9 billion.

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