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By Graham Hayday, 28 June 2002 11:15

NEWS The central figures in the $3.8bn WorldCom fraud have been subpoenaed to appear before a congressional committee next month. Chief executive John Sidgmore and former boss Bernie Ebbers will be grilled by the House Financial Services Committee on 8 July, along with recently fired financial director Scott Sullivan. A telecoms analyst with Salomon Smith Barney, Jack Grubman, will also have to answer some tough questions: he was a long-time WorldCom supporter and often advised investors to back the company, but cut his rating just one day before the company went public over the misreported billions. A spokeswoman for the House committee told Reuters: "He rated the WorldCom stock regularly and prior to the news on Monday he downgraded it. We're interested to find out why and what he knows about the company." The US government is also taking a firm stance in the wake of a whole host of financial scandals, including Enron, Global Crossing and now WorldCom. George W Bush said: "I'm concerned about the economic impact of the fact that there are some corporate leaders who have not upheld their responsibility." The president said that the economic consequences of such scandals could be dire for the country, and urged executives to "fully disclose all assets and liabilities and... treat your shareholders and employees with respect", according to the Reuters report. US Treasury Secretary Paul O'Neill has also hinted that the country's financial regulations will be toughened up. The Securities and Exchange Commission could be given the right to freeze the assets of officials involved in such scandals. The US government is also backing a $250m increase in funding for the SEC.