Waste Management Settles SEC Charges of Misleading Forecasts

Waste Management Inc., the largest U.S. trash hauler, on Wednesday settled charges that it gave false and misleading forecasts for its second-quarter 1999 earnings.

In an administrative settlement reached with the Securities and Exchange Commission, Waste Management agreed to cease and desist from future violations of securities laws, but was not fined because of remedial action and a change in management. The company did not admit or deny the regulator’s allegations.

The SEC said Waste Management had told analysts and the public during a trade conference in Dallas on June 9, 1999, that it would earn between 78 cents and 81 cents a share for its second quarter ended June 30, 1999.

But July 6, the company reported that it expected a $250-million revenue shortfall, and earnings would be between 67 cents and 70 cents a share for its second quarter.

The next day, Waste Management shares fell more than 36% to $33.94, from $53.56 per share.

The firm announced Aug. 3 that earnings for its second quarter were 58 cents a share, well below revised forecasts.

On Wednesday, Waste Management shares rose 13 cents to close at $17.81 on the New York Stock Exchange. That’s down from the company’s 52-week high of $57.38.

The securities regulator found that on June 9, 1999, the Houston-based company was “aware of significant adverse trends in its business that made its continued public support of the projections unreasonable.”