U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19557 / February 7, 2006
Accounting and Auditing Enforcement
Release No. 2373 / February 7, 2006
SEC v. Bruce E. Snyder, Jr., Civil Action No. 03 CV 4658 (S.D.Tx.) (February 1, 2006)
Federal Jury Finds that Bruce E. Snyder, Jr., Former Chief Accounting Officer of Waste Management, Inc., Engaged in Securities Fraud
On February 1, 2006, a federal jury in Houston, Texas, returned a verdict finding that Bruce E. Snyder, Jr., the former Chief Accounting Officer of Waste Management, Inc. ("WMI"), violated the antifraud provisions of the federal securities laws by failing to make certain required disclosures which caused WMI's reported financial results for the first quarter of fiscal year 1999 to be materially false and misleading. The jury also found that Snyder engaged in insider trading. The jury reached its verdict after a four-week trial in the United States District Court for the Southern District of Texas (Houston Division).
The jury found that Snyder violated the antifraud provisions of the federal securities laws, Section 10(b) of the Securities and Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 10b-5, and Section 17(a) of the Securities Act of 1933. The jury also found that Snyder aided and abetted WMI's violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-13, the reporting provisions of the federal securities laws.
The Commission's Complaint against Snyder alleged that he prepared, reviewed, and signed a materially false or misleading Form 10-Q that WMI filed with the Commission for the first quarter ended March 31, 1999, even though he knew, or was reckless in not knowing, that it failed to disclose that WMI's reported pretax income for that quarter included tens of millions of dollars of non-recurring income items. The undisclosed income items inflated WMI's EPS by approximately $0.09 or 17%. The Commission's Complaint further alleged that Snyder sold WMI stock on May 17, 1999, while in possession of the material, nonpublic information that WMI's reported pretax income for the first quarter of fiscal year 1999 included tens of millions of dollars of undisclosed, non-recurring income items. The Complaint also alleged that Snyder sold WMI stock again on June 9, 1999, when, in addition to the aforementioned information, Snyder possessed material, nonpublic information that WMI's internal earnings projections showed a large shortfall against the second quarter 1999 EPS guidance WMI had provided to the investing public.
See Litigation Release NO. 18422 / October 22, 2003.