Litigation Release No. 19943 / December 12, 2006

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 Charges Bennett Environmental, Inc., its Former Chairman and CEO, and two others with Repeatedly Disclosing False and Misleading Information

On December 8, 2006, the Securities and Exchange Commission filed a complaint in the United States District Court for the Southern District of New York, against Bennett Environmental, Inc. (BEI), a Canadian company, and its former CEO John A. Bennett, its former VP of North American Sales, Robert P.G. Griffiths and its former CFO, Richard L. Stern, for their roles in the repeated dissemination of false and misleading information concerning a Superfund soil remediation contract awarded to the company in 2003.

In its complaint, the SEC alleges that between June 2003 and April 2004, Bennett, Stern, and Griffiths caused BEI to issue seven press releases, all of which were filed with the Commission on Form 6-K, in which BEI misrepresented and exaggerated an indefinite delivery/indefinite quantity (ID/IQ) contract 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, later was cancelled by the Army Corps of Engineers, reinstated on a limited basis, and then re-solicited under materially different terms. During the relevant time period, the defendants failed to inform the public about the material changes to the ID/IQ contract, failed to correct prior false statements, and continued to misrepresent the contract by asserting that it was in full force and effect and worth C$200 million. Only after a new CEO took over at BEI did the true facts come to light, which were disclosed in a July 2004 press release.

The SEC's complaint charges BEI with violating Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 12b-20, 13a-1, and 13a-16 thereunder. The complaint charges the individual defendants with violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and aiding and abetting the company's violations. In addition, the complaint charges Stern with violating Exchange Act Rule 13a-14 for certifying a false and misleading report filed by BEI pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

BEI, Bennett, and Griffiths, without admitting or denying the allegations in the Commission's complaint, each consented to the entry of a final judgment permanently enjoining them from violating or aiding and abetting violations of the provisions they allegedly violated. Bennett agreed to pay a $120,000 civil penalty, Griffiths agreed to pay a $50,000 civil penalty, and both Bennett and Stern agreed to be barred from acting as an officer or director of a public company for a period of ten years.

The SEC staff gratefully 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.