Waste+Management+Founder,+Five+Others+Sued+for+Massive+Fraud

Waste+Management+Founder,+Five+Others+Sued+for+Massive+Fraud...

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Home | Previous Page Waste Management Founder, Five Other Former Top Officers Sued for Massive Fraud Defendants Inflated Profits by $1.7 Billion To Meet Earnings Targets; Defendants Reap Millions in Ill-Gotten Gains While Defrauded Investors Lose More Than $6 Billion FOR IMMEDIATE RELEASE 2002-44 Washington, D.C., March 26, 2002 — The Securities and Exchange Commission filed suit today against the founder and five other former top officers of Waste Management Inc., charging them with perpetrating a massive financial fraud lasting more than five years. The complaint, filed in U.S. District Court in Chicago, charges that defendants engaged in a systematic scheme to falsify and misrepresent Waste Management's financial results between 1992 and 1997. The complaint names Waste Management's former most senior officers: Dean L. Buntrock, Waste Management's founder, chairman of the board of directors, and chief executive officer during most of the relevant period; Phillip B. Rooney, president and chief operating officer, director, and CEO for a portion of the relevant period; 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. "Our complaint describes one of the most egregious accounting frauds we have seen," said Thomas C. Newkirk, associate director of the SEC's Division of Enforcement. "For years, these defendants cooked the books, enriched themselves, preserved their jobs, and duped unsuspecting shareholders." According to the complaint, the defendants violated, and aided and abetted violations of, antifraud, reporting, and record-keeping provisions of the federal securities laws. The Commission is seeking injunctions prohibiting future violations, disgorgement of defendants' ill-gotten gains, civil money penalties, and officer and director bars against all defendants. "Defendants' fraudulent conduct was driven by greed and a desire to retain their corporate positions and status in the business and social communities," Newkirk said. "Our goal is to take the profit out of securities fraud and to prevent fraudsters from serving as officers or directors of public companies." The complaint alleges that the defendants played the following roles in the scheme: Buntrock - the driving force behind the fraud. He set earnings targets, fostered a culture of fraudulent accounting, personally directed certain of the accounting changes to make the targeted earnings, and was the spokesperson who announced the company's phony numbers. At the same time, Buntrock posed as a successful entrepreneur. With charitable contributions made with fruits of his ill- gotten gains or money taken from the company, Buntrock presented himself as a pillar of the community. For example, just 10 days before 10/31/2010 Waste Management Founder, Five Ot… sec.gov/news/…/wastemgmt6.htm 1/4
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This note was uploaded on 12/28/2010 for the course BUSINESS A ACCT101 taught by Professor Haifengyou during the Fall '10 term at HKUST.

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Waste+Management+Founder,+Five+Others+Sued+for+Massive+Fraud...

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