Case Study $1$

On March $26,2002,$ the SEC charged six Waste Management executive officers for the perpetration of a five$-$year financial fraud. The following is an article summarizing the SEC's complaint against these officers:

The complaint names Waste Management's former most senior officers: Dean L$.$ Buntrock, Waste Management's founder, chairman of the board of directors, and chief executive officer during most of the relevant period; Phillip B$.$ Rooney, president and chief operating officer, director, and CEO for a portion of the relevant period; James E$.$ Koenig, executive vice president and chief financial officer; Thomas C$.$ Hau, vice president, corporate controller, and chief accounting officer; Herbert Getz, senior vice president, general counsel, and secretary; and Bruce D$.$ Tobecksen, vice president of finance.

According to the complaint, the defendants violated, and aided and abetted violations of$,$ antifraud, reporting, and record$-$keeping provisions of the federal securities laws. The Commission is seeking injunctions prohibiting future violations, disgorgement of defendants' ill$-$gotten gains, civil money penalties, and officer and director bars against all defendants.

The complaint alleges that defendants fraudulently manipulated the company's financial results to meet predetermined earnings targets. The company's