Waste Management Scandal

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Waste Management Scandal
BUS 320 Finance

Waste Management
Waste Management Incorporated is considered the nation's largest waste collector (Feder). Waste Management is a well known brand and dominates regions of the United States and Canada where they provide services. Anyone who sees their trucks tends to think, "Garbage".
During the early 1990's, instead of just picking up the garbage, Waste Management provided garbage to their investors in the form of an accounting scandal. This scandal would eventually cost investors around 6 billion dollars (Bloomberg News). This event was described by the associate director of the SEC's Division of Enforcement, Thomas C. Newkirk, as "possibly one of the most egregious accounting frauds
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Waste Management survived as an entity for several reasons. For one reason, they were a profitable company versus an operation using accounting fraud simply to survive. The company had made money, in fact a lot of money, but nothing close to the numbers provided by the executive team. Secondly, the new management took their roles very seriously and rather than shuffling their feet and papering over the problem, they acted. The new management came clean with the public, settled with shareholders, and paid $26.8 million of the $30.8 million to settle an SEC lawsuit against their former executives (Bloomberg News). This proved to be a cheaper option than continuing their obligation to pay the legal costs of fighting the suit for the group. Lastly, Waste Management was and still is a leader in the environmental side of waste hauling. They have figured out a way to profit from recycling which is of course a big issue in our nation and the world today. While people may never forget the accounting scandal, today Waste Management is seen as a leader in "green" projects. The goodwill from this and a competent management team have the company in a favorable position less than 15 years after the scandal which must be considered as very strong accomplishment.

Works Cited
Feder, Barnaby J. Waste Management Stuck in Accounting Mire. Ed. New York

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