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August 23, 2005

Business News: SEC Alleges former K-Mart CEO and CFO Misled Investors

From the New York Times:

DETROIT (AP) -- The Securities and Exchange Commission on Tuesday accused two former Kmart executives with misleading investors about the company's financial condition before the retailer's bankruptcy filing in early 2002.

The civil charges filed in U.S. District Court in Detroit allege that former chairman and CEO Charles C. Conaway and former Chief Financial Officer John T. McDonald were responsible for disclosures that were ''materially false and misleading.''

The SEC's complaint charges Conaway and McDonald with securities fraud and aiding and abetting securities fraud. It also accuses them of aiding and abetting violations of rules that require publicly traded companies to file quarterly reports and to include material information in the reports so they are not misleading.

''Investors are entitled to both accurate financial data and an accurate description of the story behind the numbers,'' Peter H. Bresnan, an associate director in the SEC's Enforcement Division, said in a statement.

LINK to rest of article

Posted by Becky at August 23, 2005 1:28 PM Posted to Investments/Finance