Former URI President/CFO John Milne Faces SEC Fraud Charges

April 14, 2008 • The Securities and Exchange Commission announced it has filed securities fraud charges against John Milne, former vice chairman, president, and chief financial officer of United Rentals Inc., Greenwich, Conn.

 

Filed in the U.S. District Court for the District of Connecticut, the SEC's complaint alleges that Milne engaged in a series of fraudulent transactions from 2000 to 2002 that were undertaken in order to meet URI's earnings forecasts and analyst expectations. The commission's complaint alleges that Milne and Michael Nolan, another former CFO of URI, carried out the fraud through a series of interlocking three-party transactions structured as “minor sale-leasebacks” to allow URI to recognize revenue prematurely and inflate profits generated from the sales. As a result, URI overstated its financial results for fiscal years 2000 and 2001 and financial periods that ended June 30, 2001, and March 31, 2002, as well as other public releases.

 

The SEC's complaint alleges that shortly after URI announced 2001 and 2002 year-end results, Milne sold approximately $38 million of URI stock that he owned, knowing that the company's announced financial results were materially overstated.

 

The U.S. Attorney's Office for the District of Connecticut also announced that Milne was indicted on conspiracy, securities fraud, making false statements to the SEC, and related charges in a parallel criminal action.

 

Click here for the SEC's litigation release: http://www.sec.gov/litigation/litreleases/2008/lr20518.htm.