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Gold/Mining/Energy : Waste Management Inc. (NYSE: WMI)

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To: CoffeePot who started this subject	6/19/2001 2:52:10 PM
From: mmmary	Read Replies (1) of 97

.SEC Fines Arthur Andersen $7 Million for Waste Management Audits Reuters WASHINGTON (June 19) - Accounting giant Arthur Andersen agreed to pay $7 million to settle federal charges it filed false and misleading audits of Waste Management Inc. in which the nation's biggest trash-hauler overstated income by more than $1 billion, regulators said Tuesday. The fine was the largest-ever civil penalty against a Big 5 accounting firm, said the Securities and Exchange Commission in announcing the settlement against Arthur Andersen and four of its current or former partners. ''This settlement allows the firm and its partners to close a very difficult chapter and move on,'' the Chicago-based firm said in a statement. ''The allegations underlying the settlement are limited to one client and reflect work that is in some cases more than seven years old,'' Arthur Andersen, which did not admit or deny the charges, said. Arthur Andersen examined Waste Management's books from 1992 through 1996, and issued audit reports that falsely claimed that the statements had been prepared using generally accepted standards, the SEC said. The agency said that the Waste Management financial statements that Arthur Andersen had overstated the Houston-based trash hauler's pre-tax income by more than $1 billion. Publicly traded companies are required to hire an accounting firm to go through their books using generally accepted accounting principles. The firms are supposed to raise any concerns with management and issue opinions about the audits. ''Arthur Andersen and its partners failed to stand up to company management and thereby betrayed their ultimate allegiance to Waste Management's shareholders and the investing public,'' said Richard Walker, the SEC's top cop. In addition to the $7 million fine, Arthur Andersen agreed to what the SEC said was the first antifraud injunction in more than 20 years against an accounting giant. ''We will not shy away from pursuing accountants and accounting firms when they fail to live up to their responsibilities to ensure the integrity of the financial reporting process,'' Walker added..

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