Ex-Waste Management CFO to pay $4 million in SEC case

WASHINGTON (Reuters) - The former chief financial officer of Waste Management Inc (WMI.N) was ordered to pay $4 million after a jury found James Koenig liable for securities fraud, falsifying company books and records, and lying to auditors, the U.S. Securities and Exchange Commission said on Thursday.

The SEC said in a statement that Koenig was convicted of committing 60 securities violations from 1992 to 1997 in a scheme to falsify Waste Management's financial results, with profits being overstated by $1.7 billion.

U.S. Judge Wayne Andersen for the Northern District of Illinois issued the final judgment against Koenig on December 21, the SEC said. The judgment also permanently bars Koenig from acting as an officer or director of a public company.

Sarah Wolff, an attorney for Koenig, said he will appeal the ruling. "Mr. Koening strongly disagrees with the jury's verdict and stands by the accounting practices used by Waste Management," Wolff said.

The final judgment follows an 11-week jury trial in 2006 after Koenig decided to fight the SEC charges against him.

"The entry of final judgment against James Koenig represents the culmination of years of hard-fought litigation," said Lou Mejia, chief litigation counsel of the SEC's division of enforcement.

The SEC said the scheme to inflate profits was achieved through false disclosures and a variety of accounting methods used to defer current period expenses whenever possible.

The fraud resulted in a restatement in February 1998, which at the time was the largest restatement in history, the agency said.

The SEC previously settled with the founder and three other top officers at Waste Management in related cases in which they had to pay a total of $30.8 million.

(Reporting by Karey Wutkowski, editing by Gerald E. McCormick)