Limited examples of lawsuits: In October 1999, Microsoft was investigated for cookie jar accounting by the Securities and Exchange Commission for its alleged misconduct in recognizing revenue.
[2] In 2002, WorldCom Inc., the carrier of about half of all Internet traffic, used the cookie jar accounting methods by using reserves to boost their earnings.
As a result of this, WorldCom's CEO, Bernard Ebbers, and CFO, Scott Sullivan, were arrested with criminal charges filed by the SEC for fraud in 2002.
[3] In 2004, Fannie Mae, a company created to promote home ownership by purchasing mortgages from banks that issue them to decrease interest rates, was caught in violation of accounting regulations that involve the recording of loans.
The SEC ordered Fannie to restate its earnings over the prior four years to resolve this cookie jar accounting incident.
[4] In 2004, Bristol-Myers Squibb, a New York-based pharmaceutical company was sued on August 4, 2004, by The Securities and Exchange Commission partly for using cookie jar accounting.