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U.S. Securities and Exchange Commission


Litigation Release No. 20009 / February 21, 2007

Accounting and Auditing Enforcement Release No. 2563 / February 21, 2007

SEC v. Bennett Environmental, Inc., John A. Bennett, Robert P.G. Griffiths and Richard L. Stern, Civil Action No. 06-Civ-14294 (S.D.N.Y.)

SEC Settles with Former CFO Richard Stern for his Role in Bennett Environmental, Inc.'s False and Misleading Disclosures

On February 9, 2007, the Securities and Exchange Commission settled fraud charges against Richard L. Stern, the former CFO of Bennett Environmental, Inc. (BEI), for his role in the repeated dissemination of false and misleading information about a Superfund soil remediation contract awarded to BEI in 2003.

The Commission's complaint, filed December 8, 2006, alleges that between June 2003 and April 2004, Stern, former CEO John Bennett and former VP of North American Sales Robert Griffiths together caused BEI to issue press releases and make SEC filings that misrepresented and exaggerated a contract that it extolled as "the largest in the Company's history" with a value of "$200 million [Canadian]." In reality, the contract had a guaranteed value of less than $250,000, was later cancelled by the Army Corps of Engineers, reinstated on a limited basis, and then re-solicited under materially different terms. The complaint alleges that, during the relevant time period, Stern and the other defendants failed to inform the public about material changes to the contract, failed to correct prior false statements, and continued to misrepresent that the contract was in full force and effect and worth C$200 million. The true facts did not come to light until July 2004, when a new CEO took over BEI and corrected the prior false statements.

Without admitting or denying the Commission's allegations , Stern has consented to the entry of a final judgment permanently enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5 and 13a-14 thereunder, and aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-16 thereunder. Stern also agreed to pay a $75,000 civil penalty and to be barred from acting as an officer or director of a public company for five years.

The SEC staff acknowledges the assistance of the Ontario Securities Commission, the Environmental Protection Agency's Office of the Inspector General and the Army Corps of Engineers in the investigation of the facts leading to this action.



Modified: 05/10/2007