A lawyer for the SEC told U.S. Magistrate Judge Steven Pepe today that former Kmart Corp. CEO Charles Conaway should pay a fine of about $24 million for misleading shareholders in the months before the retailer filed for bankruptcy in 2002. Bloomberg reports that at a hearing today on possible penalties, the SEC’s Alan Lieberman said the evidence supported such a fine and that Conaway has shown “no remorse” for his actions.
As previously discussed here, a jury returned a verdict in favor of the SEC on June 1 on all charges in its case against Conaway. The verdict followed a three-week trial in Ann Arbor, Michigan, before Magistrate Judge Pepe in which the SEC charged Conaway with misleading investors about Kmart’s financial condition in the months preceding the company’s bankruptcy.
Last month, Conaway asked the court to throw out the verdict, arguing that the jury instructions misstated the law and made it too easy for jurors to find Conaway liable in the highly technical case pressed by the SEC.
