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Justice is meted out to James Koenig, former CFO of Waste Management, for the biggest pre-Enron accounting scandal.
Kate Plourd, CFO Magazine
February 1, 2008
In March 2002, when former Waste Management Inc. CFO James Koenig and five other former executives were sued by the Securities and Exchange Commission for their roles in the then-largest accounting scandal in U.S. history, Koenig called the allegations "baseless" and claimed the facts would clear his name.
Fast-forward to 2007 and, despite his continuing denials of any wrongdoing, Koenig has learned his fate. The biggest pre-Enron/WorldCom accounting scandal came to an end this past December when a U.S. district court judge sentenced Koenig to pay $4.2 million total in disgorgement, prejudgment interest, and civil penalties, and prohibited him from serving as a director or officer of a public company.
The verdict was actually rendered in 2006, when a jury found him liable for violating securities laws 60 times between 1992 and 1997 in a scheme that resulted in a $1.7 billion overstatement in the Houston-based trash collector's profits.
Post-trial motions delayed the judgment another year, says Sarah Wolff, Koenig's attorney at law firm Reed Smith. Despite the delay in sentencing, the saga may not actually be over. Koenig "strongly disagrees with the jury's verdict and the remedies the court has imposed," says Wolff, "and looks forward to his appeal."