The Regents - University of California | Office of The President

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THIRD CAUSE OF ACTION
(Against All Defendants)
FRAUD, DECEIT AND CONCEALMENT
267. Plaintiff hereby incorporates all of the foregoing paragraphs.
268. As set forth above, Defendants, and each of them, made material
representations and omissions to Plaintiff which were false and misleading,
including but not limited to those representations and omission as to the financial
condition of WorldCom, the company’s prospects for continued growth, their
relationship with WorldCom and the reasons for their representations. These
material misrepresentation and omissions are contained in and reflected in the
Registration statements, as well as press releases, analysts’ reports, financial
statements, and other disclosures made by Defendants which support and reinforce
the misrepresentations and omissions in the registration statements.
269. These representations were false in that the financial statements were
not prepared in accordance with GAAP. Because of the fraudulent accounting of
WorldCom, as assisted by the Defendants, the financial statements showed
inflated revenues for the years 1994-2001 (including year end and quarterly
statements) and the first quarter of 2002.
270. When Defendants, and each of them, made the misrepresentations and
failed to disclose and suppressed information they had a duty to disclose, as set
forth hereinbefore, Defendants had knowledge of the falsity of their
representations and knew that they were failing to disclose material facts which
they had a duty to disclose.
271. Defendants made the misrepresentations and omitted the material
facts with the intent to defraud Plaintiff and to induce Plaintiff to invest in
WorldCom stock.
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COMPLAINT