[JURIST] US District Judge Paul Gadola [official profile] ruled Tuesday that two former executives of Kmart [corporate website] will stand trial for allegedly misleading investors about the retailer's finances before it filed for bankruptcy four years ago. Former Chief Executive Officer Charles Conaway and former Chief Financial Officer John McDonald had asked the court to dismiss the civil complaint [PDF text] filed in 2005 by the Securities and Exchange Commission [official website]. The men are accused of fraud [JURIST report] for allegedly making false statements regarding the company's financial standing during a 2001 conference call with investors.
Kmart filed for bankruptcy in 2002, reorganized as Kmart Holding Corp. in 2003 and acquired Sears in 2005 to form the new Sears Holdings Corp. [corporate website]. The SEC is seeking a ban on the two men from serving as officers at any public companies and an undisclosed amount of money. AP has more.