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U.S. Securities and Exchange Commission


Litigation Release No. 20518 / April 7, 2008

Accounting and Auditing Enforcement Release No. 2807 / April 7, 2008

SEC v. John N. Milne,, Civil Action No. 3:08-CV-505 (VLB) (D.Ct.)

SEC Charges John N. Milne, Former Vice-Chairman, President and CFO of United Rentals, Inc., with Financial Fraud

The Securities and Exchange Commission announced the filing on April 4, 2008, of securities fraud charges against John N. Milne, a former Vice Chairman, President, and Chief Financial Officer of United Rentals, Inc. ("URI"). Milne is the second URI officer, and the third CFO, charged in connection with the alleged violations. On December 12, 2007, the Commission filed settled financial fraud charges against Michael J. Nolan, another former CFO of URI. On December 27, 2001, the Commission charged Joseph F. Apuzzo, a former CFO of Terex Corporation, with aiding and abetting the fraudulent scheme.

The Commission's complaint, filed in the United States District Court for the District of Connecticut, alleges that, from 2000 through 2002, Milne engaged in a series of fraudulent transactions undertaken in order to meet URI's earnings forecasts and analyst expectations. The complaint alleges that Milne and Nolan 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, Milne sold approximately $38 million of URI stock that he owned, knowing that the company's announced financial results were materially overstated.

The Commission's complaint alleges that, as a result of his actions, Milne violated 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 aided and abetted URI's violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1 and 13a-13 thereunder. As part of this action, the Commission seeks a permanent injunction, an officer and director bar, disgorgement and prejudgment interest, civil penalties, and other equitable relief.

The U.S. Attorney's Office for the District of Connecticut also announced that Milne was indicted on conspiracy, securities fraud, making false statements to the Commission and related charges in a parallel criminal action.

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.

For further information, see Litigation Release Nos. 20396 (December 12, 2007) and 20418 (December 31, 2007).

SEC Complaint in this matter



Modified: 04/07/2008