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U.S. Securities and Exchange Commission


Litigation Release No. 20396 / December 12, 2007

Accounting and Auditing Enforcement Release No. 2757 / December 12, 2007

SEC v. Michael J. Nolan, Civil Action No. 07-CV-1833 (AVC) (D.Ct.)

SEC Files Settled Financial Fraud Charges Against Michael J. Nolan, Former CFO of United Rentals, Inc.

The Securities and Exchange Commission announced today that it filed securities fraud charges against Michael J. Nolan, a former Chief Financial Officer of United Rentals, Inc. ("URI").

The Commission's complaint, filed in the United States District Court for the District of Connecticut, alleges that, from 2000 through 2002, Nolan engaged in a series of fraudulent transactions undertaken in order to meet URI's earnings forecasts and analyst expectations. The complaint alleges that Nolan and others carried out the fraud through a series of interlocking three-party transactions, structured as "minor sale-leasebacks," to allow URI to recognize revenue prematurely and to inflate profits generated from the sales. As a result of the fraud, URI materially overstated its financial results in its Forms 10-K for fiscal years 2000 and 2001, and its Forms 10-Q for the periods ended June 30, 2001 and March 31, 2002, as well as in other public releases.

The complaint further alleges that shortly after URI announced 2001 and 2002 year-end results, Nolan sold approximately $11 million of URI stock that he owned, knowing that the company's announced financial results were materially overstated.

Nolan has consented, without admitting or denying the allegations in the complaint, to the entry of a Final Judgment, subject to the Court's approval, permanently enjoining him from violations of Section 17(a) of the Securities Act of 1933, and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934, and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, 13a-11, and 13a-13, thereunder, imposing a permanent officer and director bar, and ordering disgorgement and prejudgment interest in an amount to be determined by the Court. Nolan, who was a Certified Public Accountant at the time of the alleged fraudulent conduct, has further agreed to a Commission order suspending him from appearing or practicing before the Commission pursuant to Commission Rule 102(e).

In a parallel criminal action, the U.S. Attorney's Office for the District of Connecticut also announced today that Nolan has entered a guilty plea to one count of making false filings with the Securities and Exchange Commission, in violation of Title 15 United States Code, Sections 78m(a) and 77ff.

The Commission acknowledges the assistance of the U.S. Attorney's Office for the District of Connecticut and the New Haven Field Office of the Federal Bureau of Investigation in the investigation of this matter.

The Commission's investigation is continuing.

SEC Complaint in this matter



Modified: 12/12/2007