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WorldCom stock sinks on SEC inquiry

Shares plummet as much as 19 percent after the company reveals that securities regulators are probing its accounting procedures.

Shares of telecommunications giant WorldCom plummeted on Tuesday as much as 19 percent, after the company revealed securities regulators were probing the company's accounting procedures and loans to its officers.

The Clinton, Miss.-based company said on Monday that the Securities and Exchange Commission had requested information on a 2000 charge related to wholesale accounts, sales commissions, integration of computer systems, and the company's tracking of analysts' earnings estimates.

The SEC also asked for information on multimillion-dollar loans to WorldCom Chief Executive Bernie Ebbers and others. In a TV interview on Monday on CNBC, Ebbers said he had to meet margin calls when the company's share price fell and the alternative to loans was selling assets that were not easily convertible to cash.

The company, the No. 2 U.S. long-distance telephone carrier and owner of one of the biggest U.S. Internet backbones, said it believes all of its policies, practices and procedures have complied and continue to comply with accounting standards and laws.

WorldCom shares fell as much as 12 percent in midday on the Nasdaq on Tuesday. They last traded at $7.93.

Shares of its MCI tracking stock, which follows the performance of its long-distance business, were off 55 cents to $8.61, down 6 percent.

WorldCom has been punished of late by investor fears that the company's slowing revenue growth, competition from local telephone giants and overcapacity could result in its demise like many other telecommunications companies.

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