The Wall Street Journal reports that the US Securities and Exchange Commission (SEC) is asking a federal court in Michigan to fine former Kmart CEO Charles Conaway $8.9 million for misleading investors during his tenure at the company, and also collect what the paper refers to as “$13.7 million in ill-gotten gains.”
According to the story, “The agency also seeks to permanently bar Mr. Conaway from serving as an officer or director of a public company and asked the judge to prohibit Mr. Conaway from receiving any part of his penalty from a third party.
“In June, the SEC said a Michigan jury upheld all of its civil charges against Mr. Conaway, who was accused of making misrepresentations and omissions about the company's financial state in its 10Q filing for the third quarter and nine months ending Oct. 31, 2001, and in an earnings conference call.”
Conaway’s attorneys are seeking to have the jury verdict overturned, saying that he did not profit personally from his mistakes at Kmart.
According to the story, “The agency also seeks to permanently bar Mr. Conaway from serving as an officer or director of a public company and asked the judge to prohibit Mr. Conaway from receiving any part of his penalty from a third party.
“In June, the SEC said a Michigan jury upheld all of its civil charges against Mr. Conaway, who was accused of making misrepresentations and omissions about the company's financial state in its 10Q filing for the third quarter and nine months ending Oct. 31, 2001, and in an earnings conference call.”
Conaway’s attorneys are seeking to have the jury verdict overturned, saying that he did not profit personally from his mistakes at Kmart.
- KC's View:
- Not sure about the legalities here, but Conaway reportedly got paid more than $23 million while he was at Kmart. Sounds like personal profit to me.
