Rodney R. Proto and Earl E. DeFrates, Bruce E. Snyder, Jr.

The Securities and Exchange Commission ("Commission") today filed a settled civil injunctive action in the United States District Court for the Southern District of Texas against two former Waste Management, Inc. ("WMI") officers, Rodney R. Proto ("Proto") and Earl E. DeFrates ("DeFrates"). The Commission's Complaint charges Proto and DeFrates with insider trading in WMI stock, and with making public statements to Wall Street analysts, investment bankers, and investors, while employed by the company in May and June 1999, which they knew, or were reckless in not knowing, were materially false or misleading. At the time of their actions, Proto was WMI's President, Chief Operating Officer, and a member of the WMI Board of Directors, and DeFrates was WMI's Chief Financial Officer.

The Commission also filed a separate civil injunctive action in the United States District Court for the Southern District of Texas against WMI's former Chief Accounting Officer, Bruce E. Snyder, Jr. ("Snyder"). The Commission's Complaint against Snyder, which is not settled, charges him with insider trading in WMI stock and preparing, reviewing, and signing a materially false or misleading Form 10-Q that WMI filed with the Commission for the first quarter of its fiscal year ended December 31, 1999.

The Commission's Complaint against Proto and DeFrates alleges that each sold WMI stock in May and/or June 1999, while in possession of material, nonpublic information that WMI's reported pretax income for the first quarter of fiscal year 1999 included tens of millions of dollars of undisclosed, non-recurring income items that inflated WMI's first quarter earnings per share ("EPS") by $0.09 or 17%. The Complaint also alleges that Proto and DeFrates presented a materially false or misleading picture of the Company's first quarter operations to Wall Street analysts and investors by failing to disclose in a May 6, 1999 press release they approved, and in a public conference call they held with Wall Street analysts, that WMI's reported first quarter pretax income and EPS figures included a material amount of non-recurring items. The Complaint alleges that if Proto and DeFrates had properly disclosed the non-recurring items, the investing public would have learned, among other things, that the company's reported quarterly earnings from normal operations were $0.52 per share, $0.09 per share lower than its first quarter 1999 EPS guidance and lower than its fourth quarter 1998 EPS.

The Commission's Complaint against Proto and DeFrates further alleges that they made additional materially false or misleading statements in June and July 1999, about WMI's ability to meet its previously announced second quarter 1999 earnings guidance of $0.78 to $0.82 per share. The Complaint alleges that between June 7 and July 2, 1999, on at least six separate occasions, Proto and/or DeFrates confirmed the company's second quarter 1999 EPS guidance in conversations with Wall Street analysts, investment bankers, and members of the public, even though they knew, or were reckless in not knowing, that WMI would fall well short of this previously stated earnings guidance.

The Commission's Complaint against Snyder alleges that he prepared, reviewed, and signed a materially false or misleading Form 10-Q that WMI filed with the Commission for the first quarter ended March 31, 1999, even though he knew, or was reckless in not knowing, that it failed to disclose that WMI's reported pretax income for that quarter included tens of millions of dollars of non-recurring income items. The undisclosed income items inflated WMI's EPS by approximately $0.09 or 17%. The Commission's Complaint further alleges that Snyder sold WMI stock on May 17, 1999, while in possession of the material, nonpublic information that WMI's reported pretax income for the first quarter of fiscal year 1999 included tens of millions of dollars of undisclosed, non-recurring income items. In addition, the Complaint against Snyder alleges that he sold WMI stock on June 9, 1999, while in possession of material nonpublic information indicating, among other things, WMI's internal earnings projections showed a large shortfall against its second quarter 1999 EPS guidance provided to the investing public.

According to each of the Commission's Complaints, on July 6, 1999, WMI issued a press release warning that the company had substantially lowered its earnings expectations for the second quarter of 1999 due to a $250 million shortfall in revenues. The company stated that it expected second quarter earnings per share to be in the range of $0.67 to $0.70, compared to its previous earnings per share guidance of $0.78 to $0.82. The Complaint alleges that, in reaction to this news, WMI's stock price dropped 37% from $53.56 per share to $33.94 per share.

Proto and DeFrates, without admitting or denying the allegations in the Commission's Complaint, each consented to an order permanently enjoining him from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5. In addition, Proto and DeFrates consented to an order barring each of them, respectively, from serving as an officer or director of a public company for a period of five years.

Proto has consented to pay a total of $3,721,177. This amount represents: (1) $1,503,670 in disgorgement of his illegal insider trading losses avoided, plus prejudgment interest of $513,837; (2) a civil penalty equal to his illegal insider trading losses avoided of $1,503,670; and (3) a $200,000 civil penalty for making materially false or misleading statements regarding WMI's first quarter 1999 earnings and WMI's ability to meet its previously announced second quarter 1999 earnings guidance. DeFrates has consented to pay a total of $482,779. This amount represents: (1) $121,217 in disgorgement of his illegal insider trading losses avoided, plus prejudgment interest of $40,345; (2) a civil penalty equal to his losses avoided of $121,217; and (3) a $200,000 civil penalty for making materially false or misleading statements regarding WMI's first quarter 1999 earnings and WMI's ability to meet its previously announced second quarter 1999 earnings guidance.

The Commission's Complaint against Snyder seeks an order enjoining him from further violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Exchange Act Rule 10b-5, and from aiding and abetting violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-13. The Commission also seeks an order barring him from serving as an officer or director of a public company. The Commission's Complaint further seeks disgorgement of Snyder's illegal insider trading losses avoided, plus prejudgment interest, and civil penalties for insider trading and for the fraudulent financial reporting.

The SEC's complaint in SEC v. Bruce E. Snyder, Jr. can be found on the SEC's web site at:

SEC's complaint in SEC v. Rodney R. Proto and Earl E. DeFrates

SEC's complaint in SEC v. Bruce E. Snyder, Jr.