“The WorldCom accounting scandal threatened to grow Monday as the company disclosed that its profits might have been exaggerated as far back as 1999, or two years earlier than previously disclosed,” writes Simon Romero in today’s New York Times.

“The disclosure of new accounting problems, which one person briefed on the situation said could indicate that WorldCom overstated profits by more than $1 billion in 1999 and 2000, was the latest blow for the company. Last week it said that it had overstated pretax profits by $3.8 billion in 2001 and early this year.”

“It also disclosed yesterday that it was in default on some debts and that its stock would be delisted from the Nasdaq stock market on Friday. Its share price plunged on volume that set a record for Nasdaq. Worries over the possibilities of more scandals helped send the Nasdaq composite index down 4 percent to a five-year low.”

“WorldCom’s disclosure of possible new accounting problems came in a filing that the Securities and Exchange Commission had ordered to provide details of its 2001 and 2002 accounting irregularities. The S.E.C. filed civil fraud allegations against the company last week.”

“WorldCom said yesterday that it was investigating whether accounting reserves had been improperly used in 1999 and 2000. Such reserves, which are set up after mergers and other events, can be used later to increase profits, a tactic that may be improper under some circumstances. The company did not give details. Tapping into those reserves could have allowed WorldCom to create a facade of robust financial health when its strategy of aggressively acquiring other companies was at its peak.”

“A number of WorldCom executives and directors sold shares during 1999 and 2000, the period covered by the new accounting issues. Scott D. Sullivan, the ousted chief financial officer, sold shares worth $18 million in August 2000. John Sidgmore, a director who became chief executive after the resignation of Bernard J. Ebbers in April, made more than $35 million from the sale of his shares in June 1999. Max Bobbitt, the chairman of WorldCom’s audit committee, made $1.8 million from selling his stock in February 1999.”

“WorldCom’s new statements about the already disclosed accounting problems were sketchy and provided little additional information. They were denounced by Harvey L. Pitt, the S.E.C.’s chairman. ‘WorldCom’s statement is wholly inadequate and incomplete,” he said. “It demonstrates a lack of commitment to full disclosure to investors and less than full cooperation with the S.E.C.’ “