While the insurance policy for WorldCom directors and officers provided $100 million in coverage, the risk was that the directors' exposure could have been much greater.

One WorldCom director who did not appear to be standing behind the stock was Francesco Galesi.

As a result of yesterday's settlement, defendants remaining in the case include Arthur Andersen, WorldCom's auditor, and 12 former WorldCom directors.

The report is highly critical of Mr. Ebbers, other members of management, the WorldCom directors, its outside accountants and Wall Street analysts.

A landmark settlement last month that had 10 former WorldCom directors agreeing to pay $18 million from their own pockets to investors who lost money in the company's failure was scuttled yesterday.

Because yesterday's ruling turned on one technical aspect of the settlement with the former WorldCom directors, it is not expected to deter restive shareholders from trying to make corporate board members accountable.

George Sard, a spokesman for the investment banks, said: "The bond underwriters have no objection to the WorldCom directors entering into a lawful settlement with investors.

All were WorldCom directors from 1999 to 2002.

A former WorldCom director, Mr. Galesi is currently a defendant in a class-action lawsuit by investors.

A longtime WorldCom director has resigned and agreed to pay hundreds of thousands of dollars for benefits he received in the years before the company collapsed into bankruptcy.