Tenet's Barbakow Turns Tables in WorldCom Loss

Tenet's (THC) former CEO is getting a taste of his own medicine.

Jeffrey Barbakow -- who cashed in $111 million worth of Tenet options before the stock collapsed in 2002 -- is now complaining that he feels he was misled about the health of another company.

According to the Los Angeles Times, Barbakow has filed a lawsuit seeking unspecified damages to help cover "tens of millions of dollars" worth of losses he suffered as WorldCom (now MCI) spiraled into bankruptcy two years ago. Barbakow claims he would have sold his WorldCom stock if he hadn't been tricked into believing that the company was "vibrant" and "financially secure," the newspaper reported. He targets company outsiders -- investment banking firm Citigroup Global Markets, former Citigroup analyst Jack Grubman and former WorldCom auditor Arthur Andersen -- for allegedly abetting "massive financial and accounting frauds," the newspaper added.

The big players surrounding the demise of WorldCom are certainly no strangers to criticism. Founder Bernie Ebbers has pleaded innocent to federal fraud charges, and Citi and Grubman have been named as defendants in numerous class-action suits. Andersen, for its part, told the Times that Barbakow "should direct his fire toward the WorldCom board and management" instead.

But what makes Barbakow's claim ironic is his standing as the leading target of Tenet shareholder invective. The Tenet Shareholder Committee, loudly critical of the company for years, this spring even ran a newspaper ad demanding that Barbakow return huge sums of money -- including his stock option profits -- to the struggling company.

"Mr. Barbakow, give that money back!" declares the ad, which ran in Barbakow's hometown newspaper in the resort community of Santa Barbara, Calif. "Our company needs this money now. ... Shareholders lost $18.7 billion in value. Is this fair?"

Steve Morrissey, Barbakow's attorney, declined to comment on either Barbakow's lawsuit or the Tenet Shareholder Committee's complaints when contacted by TheStreet.com on Tuesday.