X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The Securities and Exchange Commission filed suit March 26 against the founder and five other former top officers of Waste Management Inc., alleging that they — with the assistance of long-time auditor Arthur Andersen — fraudulently inflated profits by $1.7 billion to meet earnings targets. The complaint, filed in the U.S. District Court in Chicago, charges that the defendants “engaged in a systematic scheme to falsify and misrepresent Waste Management’s financial results” between 1992 and 1997, the SEC said in a statement. The SEC is seeking injunctions prohibiting future violations, disgorgement of defendants’ allegedly ill-gotten gains, civil money penalties, and director and officers bars against all defendants. In the aftermath of the collapse of Enron Corp., the SEC has said it will employ tools such as disgorgement and D&O bars more often as it seeks to battle corporate governance lapses and financial reporting frauds. “Our goal is to take the profit out of securities fraud and to prevent fraudsters from serving as officers or directors of public companies,” Thomas C. Newkirk, associate director of the SEC’s enforcement division, said in a statement. The defendants in the Waste Management case were allegedly aided in their fraud by Andersen, which issued unqualified audit reports on the company’s annual financial statements, the SEC said. Andersen and the SEC settled in June. The auditing firm, which admitted no wrongdoing, was fined $7 million by the securities regulator for its involvement. Three Andersen partners and a retired partner also settled charges with the SEC. Joining a long line of companies that have dropped Andersen as its auditor for its role in Enron’s bankruptcy, Houston-based Waste Management, the No. 1 U.S. waste hauler, announced last week that it selected Ernst & Young as its auditor, replacing Andersen. The auditing firm was recently indicted by the Department of Justice for shredding documents related to Enron. “The actions referenced in the complaint occurred five to 10 years ago and all those charged left the company nearly four years ago,” A. Maurice Myers, Waste Management’s chairman, president and chief executive, said in a statement. “We have cooperated fully with the SEC in the investigation and do not believe that the SEC will seek any action against New Waste Management in connection with the events detailed in the complaint,” he said. Waste Management merged with USA Waste Services Inc. in 1998. In February of that year, Waste Management filed acknowledged that it had misstated its pre-tax earnings by about $1.7 billion. “Our complaint describes one of the most egregious accounting frauds we have seen,” Newkirk said. “For years, these defendants cooked the books, enriched themselves, preserved their jobs, and duped unsuspecting shareholders.” The complaint names Dean L. Buntrock, the company’s founder, chairman of the board of directors, and chief executive during most of the relevant period; and Phillip B. Rooney, president and chief operating officer, director, and chief executive for a portion of the relevant period. Also, James E. Koenig, executive vice president and chief financial officer; Thomas C. Hau, vice president, corporate controller, and chief accounting officer; Herbert Getz, senior vice president, general counsel, and secretary; and Bruce D. Tobecksen, vice president of finance. The individuals could not be reached. Copyright (c)2002 TDD, LLC. All rights reserved.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.