Global markets continue slide as WorldCom scandal takes new turn

HOPES of a market recovery were dashed yesterday after a sliding Wall Street led the FTSE to a new five-year low of 4224.1, despite the index having raced ahead more than 100 points in early trade.

Downbeat US consumer confidence figures and further accounting scandal s conspired to send the Dow Jones Industrial Average 117 points lower by the close .

Marking a fifth successive day in the red, the FTSE’s eventual 5.9 point slide came as a particularly bitter pill for investors, with this week’s trade having seen a total of 391 points - or 93 billion - wiped from the index.

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Alex Scott, analyst at Seven Investment Management, said: "Although we are now closer to the bottom, it’s unlikely we have reached it yet. There’s a risk we will have more of a shake-out before we can say the worst is over."

The news came amid fresh accountancy concerns relating to US oil firm Duke Energy, which revealed it had received subpoenas from federal agencies requesting documents relating to its trading activities.

And the WorldCom scandal took a new twist after it emerged the firm’s sacked chief financial officer told the company’s lawyers that former chairman Bernie Ebbers knew of the illegal accounting practices going on at the firm.

Chairman of the US House Energy and Commerce Committee, Billy Tauzin, said that Scott Sullivan made the revelation as part of the internal investigation which unearthed the US$3.9 billion (2.5 billion) fraud.

Tauzin, a Republican from Louisiana, added: "So this is the first evidence that we have. At least the CFO is saying to attorneys within the corporation that his boss, the CEO of the company, actually knew that the books were being cooked."

Investigators for Tauzin’s committee met this week with WorldCom lawyers, who said they had interviewed a number of people about the scandal, including Sullivan and Ebbers. They insisted Ebbers denies any wrongdoing. Neither Ebbers nor his lawyer were available for comment.

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