According to the docket dated April 20, 2004, on September 17, 1999 the parties filed the Stipulation and agreement of compromise and settlement. In the Minute Order dated September 17, 1999, the action is dismissed with prejudice upon the terms and conditions set forth in the Stipulation. The case is closed.
The original complaint asserts that Waste Management and the named officers violated the Securities Exchange Act of 1934 by reporting fictitious increases in income and earnings from continuing operations and by concealing the fact that
material amounts of reported income and earnings were due to non-recurring
items, in particular gains from sale of divested operations and proceeds from
the settlement of claims against insurance carriers. These falsehoods and concealments deceived investors about the fact that the company's operating income, earnings and profit margins had actually declined, rather than increased. It was not until these non-recurring additions to Waste Management's results reported in late October 1997, that the company
disclosed that material amounts of 1996 income were non-recurring.
Upon that disclosure Dow Jones News Service remarked that the company's
reported financial results "had been puffed up by non-recurring gains that
hadn't been disclosed at the time." Then, in mid-November 1997 Waste Management restated the company's 1996 quarterly financial statements belatedly revealing a trend of declining earnings from continuing operations in the second quarter of that year, reducing those earnings by 10%. The complaint also alleges that Waste Management revealed in November 1997
that certain of its assets, particularly its landfills, trucks and other equipment were overvalued. At that time, the company took a charge of $173 million due to this overstatement, and analysts estimate that the company's over-valuation of its assets would result in further write-downs of as much as $1 billion. Upon these disclosures one securities analyst stated that Waste Management had finally "come clean" about its accounting, while another analyst observed that "we believe that historical numbers are unreliable and are being reaudited." Moreover, as reported in Business Week, Waste Management's fourth quarter earnings would be another shocker, describing the company's accounting practices as "spooky." The complaint further alleges that, as a result of defendants' violations, the market price of Waste Management stock during the Class Period was as high as $37.50 per share, and tumbled to as low as $21 15/16 at the end of the Class Period. The action was filed by purchasers of Waste Management stock, and alleges
that the market price of the company's stock was artificially inflated during
the Class Period as a result of these misrepresentations and omissions.
Plaintiffs seek to recover damages suffered by investors who bought Waste
Management stock between Oct. 17, 1996 and Oct. 30, 1997, and is represented.