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U.S. Securities and Exchange Commission


Litigation Release No. 21247 / October 13, 2009

Accounting and Auditing Enforcement Release No. 3058 / October 13, 2009

Securities and Exchange Commission v. John N. Milne, (United States District Court for the District of Connecticut, Civil Action No. 3:08-cv-00505 (EBB)


The Securities and Exchange Commission announced today that John N. Milne, a former Vice Chairman, President and Chief Financial Officer of United Rentals, Inc. (“URI”) has agreed to settle pending fraud charges filed against him by the Commission. Without admitting or denying the allegations in the complaint, which was filed on April 7, 2008, Milne consented to the entry of a Final Judgment, subject to the court’s approval, permanently enjoining him from future 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, and 13a-13, thereunder, imposing a permanent officer and director bar against him, and ordering him to pay disgorgement and prejudgment interest of $6.25 million.

The Commission’s complaint 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 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, Milne sold URI stock that he owned, knowing that the company’s announced financial results were materially overstated.

The U.S. Attorney’s Office for the District of Connecticut also announced that Milne today pleaded guilty to one count of conspiracy to falsify the books and records of URI while he served as its CFO, and that he has agreed to a term of incarceration of 24–30 months.

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 this matter.

For more information, see Litigation Release Nos. 20396 (December 12, 2007), 20418 (December 31, 2007), 20518 (April 7, 2008), 20706 (September 8, 2008), and 21177 (August 12, 2009).




Modified: 10/13/2009