Two former K-Mart officials have been charged by the FCC with making “materially false and misleading” disclosures to individuals who hold stock in the company right before the bankruptcy filing that occured in 2002. U.S. District Court located in Detroit, charges both Charles C. Conaway, former chairman and John T. McDonald (former CFO) with security fraud and accuses them with abetting violations requiring companies that are traded publicly to file quarterly reports. FCC says KMart failed to disclose reasons for a huge inventory buildup in 2001 which impacted the company’s liquidity. The complaint states that both McDonald and Conaway withheld $570 million in vendor payments by end of 2001’s third quarter. They are being charged with lying relating to vendors not being paid on time and the SEC is currently working on brining civil penalties against both McDonaland and Conaway.

This entry was posted on Wednesday, August 24th, 2005 at 2:57 pm and is filed under General Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.