The Securities and Exchange Commission (SEC) has filed a civil suit against six former executives of Waste Management Inc., saying they illegally inflated the trash-hauling giant's profits by $1.7 billion between 1992 and 1997.
As reported in a story by The Washington Post, SEC also claims the former executives of Houston-based Waste Management and its auditor, Arthur Andersen, conspired to hide the accounting fraud, which cost shareholders $6 billion when the trash hauler was forced to restate its earnings in 1997.
The suit accuses Waste Management founder Dean L. Buntrock and five others of accounting fraud. All the accused have denied the charges.
Waste Management itself is not named in the suit. The company has been under new management since 1999, when former Yellow Corp. CEO and noted turnaround specialist A. Maurice Myers took over the top slot at the trash hauling firm. At the time, he was the sixth CEO at Waste Management in three years.
Arthur Andersen paid $7 million to SEC in June of last year to settle its part of SEC's civil case.