WorldCom Won't Be the Last Scandal

The credibility crisis just got worse with tonight's WorldCom news.

This latest accounting fiasco won't offer comfort to the average investor who is currently underwater with a mutual fund. That very investor may decide that 1% in a money market is better than the risk of the stock market, and that may be the safe bet (for now!)

WorldCom(WCOM Quote) isn't likely to be the last disaster. And as I noted on the Columnist Conversation on RealMoney.com earlier tonight, there was so much at stake during the bubble that as Arthur Andersen is replaced and as boards of directors -- worried about their own liabilities -- get tougher, more is bound to come out. (Maybe WorldCom, one trusty reader writes, will finally put an end to the use of EBITDA (earnings before interest, taxes, depreciation and amortization) as a measurement of value.)

We haven't even started to hear about big restatements from smaller companies, though the alleged fraud at Peregrine Systems(PRGN Quote) is a prime example of what investors may still have to deal with. ...