Waste Management settles fraud case tied to ex-officers

August 30, 2005|By BLOOMBERG NEWS

WASHINGTON - The Securities and Exchange Commission said yesterday that it settled an accounting fraud lawsuit against four former executives at Waste Management Inc., the world's largest trash hauler, for $30.8 million.

The company disclosed the settlement Friday, when it was approved in U.S. District Court in Chicago.

Waste Management, based in Houston, said it would pay for almost all of the accord, or $26.8 million, to avoid continuing legal costs for its former officials in the three-year-old case.

Dean L. Buntrock, the company's former chief executive, and three other former Waste Management executives agreed to pay the remaining $4 million themselves, with Buntrock paying $2.3 million.

Under the accord, Waste Management agreed to pay $17.1 million for Buntrock, whom the agency accused in 2002 of leading a fraud from 1992 to 1997 that cost shareholders $6 billion.

Buntrock, who founded Waste Management in 1968 and took the company public in 1971, neither admitted nor denied wrongdoing, the SEC said yesterday in a release posted on the agency's Web site.

Waste Management said it also agreed to pay $7.60 million for Phillip B. Rooney, 61; $1.15 million for Thomas C. Hau, 69, and $950,000 for Herbert A. Getz, 50.

Rooney, the company's former chief operating officer, agreed to pay a $1.1 million fine. Hau, the one-time chief accounting officer, and Getz, the former general counsel, agreed to fines of $430,000 and $200,000, respectively, the SEC said. Like Buntrock, none admitted or denied wrongdoing.

The SEC also barred all four men from serving as officers or directors of a public company and banned Getz from representing legal clients in matters at the SEC for five years.

Waste Management restated its results for that period in 1998, cutting profit by $1.7 billion in what the SEC said then was the largest-ever accounting correction.

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