The U.S. Securities and Exchange Commission reports that distributions from its Fair Fund to investor victims of the WorldCom, Inc. accounting fraud have surpassed US$500 million.

The commission sued WorldCom in 2002, after the company disclosed it had made misstatements on its financial statements for the preceding five fiscal quarters. In July 2003, the District Court entered a final judgment ordering WorldCom to pay a US$750 million civil penalty. This penalty was placed in a fund for the benefit of WorldCom’s investor victims. Richard Breeden, the SEC’s distribution agent for the Fair Fund, has advised the agency that he expects the remaining US$250 million to be distributed later this year upon final resolution by the court of any contested claims.

The distribution was made pursuant to the Sarbanes-Oxley Act, which gave the SEC the ability to seek court approval to distribute civil money penalties along with disgorgement to victims of securities fraud. By law, prior to 2002, all civil penalties obtained by the SEC in securities enforcement actions were deposited in the general fund of the U.S. Treasury.

“The distribution of over a half-billion dollars through the SEC’s WorldCom Fair Fund marks an important milestone in our successful program to return monies to injured investors,” said SEC chairman Christopher Cox. “In the last four years, through this and other SEC distributions, the commission has returned nearly US$2 billion to investor victims. I anticipate substantial additional distributions to investors in the near future.”