Betty L. Vinson and Troy M. Normand
Litigation Release No. 17883 / December 6, 2002
Accounting and Auditing Enforcement Release No. 1683 / December 6, 2002
Vinson and Normand, Two Former WorldCom Accounting Managers, Are Permanently Enjoined from Committing Securities Fraud and Other Violations
Securities and Exchange Commission v. Betty L. Vinson and Troy M. Normand, Civil Action No. 02 CV 8083 (JSR)
The Securities and Exchange Commission announced today that judgments of permanent injunction were entered on November 26 in its pending civil enforcement action in the WorldCom matter against Betty L. Vinson and Troy M. Normand, former accountants in the General Accounting Department of WorldCom, Inc. This action is pending in the U.S. District Court for the Southern District of New York before Judge Jed S. Rakoff. The judgments signed by Judge Rakoff impose the full injunctive relief sought by the Commission and provide that monetary relief will be decided by the Court at a later date. Each defendant consented, without admitting or denying the allegations in the Commission's complaint, to the entry of the judgment against her or him. Based on the permanent injunction imposed by the Court against Vinson, the Commission today suspended her from appearing or practicing before the Commission as an accountant under Rule 102(e) of the Commission's Rules of Practice. (In the Matter of Betty L. Vinson, CPA, Rel. 33-8158; AAE No. 1686; File No. 3-10963.)
The Commission's investigation into matters related to WorldCom's financial fraud is continuing.
In its complaint in the action against Vinson and Normand pending before Judge Rakoff, the Commission charged Vinson and Normand with participating in a massive fraud that inflated WorldCom's earnings at the direction and with the knowledge of WorldCom's senior management. The Commission sought permanent injunctions, disgorgement of any ill-gotten gains, and civil money penalties. (Litigation Release No. 17783.)
The judgments entered against Vinson and Normand, among other things: (1) enjoin them from violating the antifraud, books and records, and internal controls provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5 and 13b2-1 thereunder), and from aiding and abetting violations of the periodic reporting, books and records, and internal controls provisions (Exchange Act Sections 13(a) and 13(b)(2)(A) & (B) and Rules 12b-20, 13a-1 and 13a-13 thereunder); (2) provide that any monetary relief will be decided by the Court at a hearing to be held upon motion of the Commission or the instance of the Court; and (3) provide that the Court retains jurisdiction of the action for all purposes, including the imposition of additional equitable remedies or sanctions, if any, as determined following a hearing.
These judgments relate to the fourth of four civil actions the Commission has filed thus far in connection with the financial fraud at WorldCom. The first action was filed against WorldCom, Inc. on June 26, 2002, the day after WorldCom announced that it intended to restate its financial results for 2001 and the first quarter of 2002. (Litigation Release No. 17588.) The Commission filed an amended complaint against WorldCom on November 5. (Litigation Release No. 17829.) On November 26, the court entered a judgment against WorldCom, by consent, imposing the full injunctive relief sought by the Commission; ordering an extensive review of the company's corporate governance systems, policies, plans, and practices; ordering a review of WorldCom's internal accounting control structure and policies; ordering that WorldCom provide reasonable training and education to certain officers and employees to minimize the possibility of future violations of the federal securities laws; and providing that civil money penalties, if any, will be decided by the Court at a later date.
The Commission's second enforcement action was filed against former WorldCom Controller David F. Myers on September 26. (Litigation Release No. 17753.) The Commission's third enforcement action was filed against Vinson and Normand's supervisor, former WorldCom Director of General Accounting Buford "Buddy" Yates, Jr., on October 7. (Litigation Release No. 17771.) On November 14, Judge Rakoff entered judgments against Myers and Yates that imposed injunctive relief and officer and director bars and provided that any further relief will be decided at a later date. (Litigation Release No. 17842.) Based on the injunctions, Myers and Yates were suspended today from appearing or practicing before the Commission as accountants under Rule 102(e) of the Commission's Rules of Practice. (In the Matter of David F. Myers, Rel.33-8157, AAE Rel. 1685, File No.3-10965; and In the Matter of Buford Yates, Jr., Rel. 33-8156, AAE Rel. 1684, File No. 3-10964.)
The Commission acknowledges the assistance and cooperation of the U.S. Attorneys' Offices for the Southern District of New York and Southern District of Mississippi, and the Federal Bureau of Investigation. Both Vinson and Normand have pled guilty to criminal charges prosecuted by the U.S. Attorney's Office for the Southern District of New York.
Last Reviewed or Updated: June 27, 2023