Judge hears closing arguments in penalty phase of ex-Kmart CEO’s civil fraud trial; no ruling
By APThursday, September 17, 2009
No penalty yet in ex-Kmart CEO’s civil fraud trial
ANN ARBOR, Mich. — A judge has heard closing arguments in the penalty phase of a civil trial against the former head of Kmart Corp., who was found liable of misleading investors eight years ago.
U.S. Magistrate Judge Steven Pepe (Payp) didn’t make a ruling Thursday in Ann Arbor, Mich. Lawyers for the Securities and Exchange Commission and Charles Conaway can file written briefs on a few more issues.
The SEC sued Conaway, saying he misled investors about Kmart in a phone call with Wall Street analysts and in a report filed with regulators in 2001, a few months before a bankruptcy filing. A jury found him liable in June.
The SEC wants Conaway to pay about $13.5 million. His lawyers say the maximum penalty can only be $60,000.
