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News > Companies
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Waste ex-CEO sues SEC
Former Waste Management head says SEC officials audited company in past.
February 22, 2002: 7:34 a.m. ET

graphic NEW YORK (CNN/Money) - The former CEO of Waste Management Inc. filed a suit against the Securities and Exchange Commission Thursday alleging a conflict of interest in its investigation into possible accounting improprieties, turning the tables on the regulator, according to a published report.

After the SEC informed former Waste Management (WMI: Research, Estimates) CEO Dean Buntrock it planned to file charges against him following a four-year investigation of his alleged involvement in accounting problems at the company, he turned around and sued the SEC claiming a conflict because two of the investigating officials formerly worked with the company, the Wall Street Journal reported.

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According to government ethics rules, SEC officials can't take part in investigations into former clients or employers.

The Journal reported that the suit said Robert Herdman, SEC chief accountant, and Charles Niemeier, enforcement division chief accountant, prepared an audit of the company that was cited in the SEC case. 

Former SEC Chairman Roderick Hills, who joined the Waste Management board in 1997, hired Herdman and Niemeier, both in the private sector at the time, to conduct an intensive audit of the company, which led to a $3.54 billion pretax charge in Feb. 1998, according to the report.

The investigation also led to one of the biggest restatements of earnings, $1.43 billion from 1992 to 1996, after which the SEC stepped up their investigation of the company, the Journal reported. 

Shares of Waste Management closed at $24.85 Thursday. graphic

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