The Securities and Exchange Commission said Monday that it had settled an accounting fraud suit against four former executives at Waste Management Inc., the world's largest trash hauler, for $30.87 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 $26.84 million, to avoid continuing legal costs for its former executives in the 3-year-old case.
Dean Buntrock, the company's 74-year-old former chief executive, and three other former executives agreed to pay the remaining nearly $4 million themselves, with Buntrock paying $2.3 million, the largest fine imposed on an individual in an SEC accounting fraud case.
"This was a massive accounting fraud perpetrated by the highest-ranking officers at Waste Management," SEC lawyer Scott Friestad said. "The egregiousness of the conduct is reflected in the severity of the sanctions."
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.
The SEC's suit related to "events dating back 13 years," Buntrock's lawyer, John McCarthy of the firm Bell, Boyd & Lloyd in Chicago, said Friday. "It involved highly complex and judgment issues that would have resulted in a long and complicated trial. My client decided it was better to settle the case."
Waste Management said it also agreed to pay $7.6 million for Phillip Rooney, $1.15 million for Thomas Hau and $950,000 for Herbert Getz.
Rooney, the company's former chief operating officer, agreed to pay a $1.1-million fine, the SEC said. Hau, the former chief accounting officer, and Getz, the former general counsel, agreed to fines of $430,000 and $200,000, respectively. None of the men admitted or denied wrongdoing.