Former WMI Chief Sues Over SEC Investigation

Date: February 21, 2002

Source: News Room

The former chief executive of Waste Management Inc. (NYSE:WMI) recently stated he has been told that federal regulators plan to file civil charges against him for his alleged role in accounting improprieties in the mid-1990s. Dean Buntrock maintains, in a lawsuit filed last week in U.S. District Court in Chicago, that the Securities and Exchange Commission is not entitled to take the action against him because two key SEC officials have conflicts of interest from their ties to the accounting industry and previous work for Waste Management. Buntrock is asking the court to prevent the SEC from suing him until measures are taken to ensure that the agency can act impartially. The SEC has been investigating Waste Management and its accounting for about four years. Buntrock says the SEC's allegations are based on a 1997 analysis of accounting problems conducted for Waste Management by the SEC officials as consulting professionals while they were in private practice. Their analysis led Waste Management to disclose that it had overstated its earnings by $1.43 billion from 1992 to 1996. The SEC last June sued accounting firm Arthur Andersen LLP, alleging it issued false and misleading audit reports that inflated Waste Management's earnings by more than $1 billion for the years 1993 through 1996. Andersen, which also was the auditor of collapsed Enron Corp., agreed to pay a $7 million civil fine to settle the SEC's suit without admitting to or denying the allegations. In November, Waste Management agreed to pay $457 million to settle a class-action suit alleging its executives misled investors about its finances two years ago to drive up the stock price.

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