IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION

Plaintiff

Case No. 02 C 2180

JAMES E. KOENIG Judge Wayne R. Andersen

Defendant.

JURY INSTRUCTIO ND VERDICT FORM SUBMITTED TO THE JURY

Defendant James E. Koenig, by his attorneys, respectfully submits the attached

jury instructions and verdict foun, which the Court submitted to the jury on June 28

2006.

Dated: June 29, 2006

JAMES E. KOENIG

By: s/Sarah R. Wolff

Sarah R. Wolff (Bar No. 3123733)

Jonathan S. Quinn (Bar No. 6200495)

Matthew J. O' Hara (Bar No.6237795)

Chrstopher R. Clark (Bar No. 6236859)

10 South Wacker Drive

Chicago, IL 60606

(312) 207- 1000

swolff (g sachnoff.com

Attorneys for Defendant James E. Koenig

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UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JAMES E. KOENIG

SECURITIES AND EXCHANGE COMMISSION

, )

Defendant. )

Plaintiff No. 02 C 2180

Honorable Wayne R. Andersen

JUY INSTRUCTIONS

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FUNCTIONS OF THE COURT AND THE JURY

Members of the jury, you have seen and heard all the evidence and arguments of the

attorneys. Now I wil instrct you on the law.

You have two duties as a jury. Your first duty is to decide the facts from the evidence in

the case. This is your job, and yours alone.

Your second duty is to apply the law that I give you to the facts. You must follow

these instructions, even if you disagree with them. Each of the instructions is important, and you

must follow all of them.

Perfoun these duties fairly and impartially. In deciding your verdict, you must not allow

sympathy, bias, prejudice, fear or public opinion to influence you.

Nothing I say now, and nothing I said or did during the trial, is meant to indicate any

opinion on my part about what the facts are or about what your verdict should be.

Instruction No.

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ALL LITIGANTS EQUAL BEFORE THE LAW

The fact that a governental entity, the Securities and Exchange Commission, is the

plaintiff in this case must not affect your decision in any way. A governental agency and all

other persons stand equal before the law and are to be dealt with as equals in a court of justice.

Instruction No.

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EVIDENCE

The evidence consists of the testimony of the witnesses, the exhibits admitted in

evidence, and stipulations.

A stipulation is an agreement between both sides that certain facts are true.

Instruction No.

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DEPOSITION TESTIMONY

During the trial, certain testimony was presented to you by video tape. You should give

this testimony the same consideration you would give it had the witnesses appeared and testified

here in court.

Instruction No.

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WHAT IS NOT EVIDENCE

Certain things are not to be considered as evidence. I wil list them for you:

First, if I told you to disregard any testimony or exhibits or struck any testimony or

exhibits from the record, such testimony or exhibits are not evidence and must not be

considered.

Second, anything that you may have seen or heard outside the courtroom is not

evidence and must be entirely disregarded. This includes any press, radio, or television

reports you may have seen or heard. Such reports are not evidence and your verdict must not be

influenced in any way by such publicity.

Third, questions and objections or comments by the lawyers are not evidence.

Lawyers have a duty to object when they believe a question is improper. You should not be

influenced by any objection, and you should not infer from my rulings that I have any view as to

how you should decide the case.

Fourth, the lawyers' opening statements and closing arguments to you are not evidence.

The purpose of these is to discuss the issues and the evidence. If the evidence as you remember it

differs from what the lawyers said, your memory is what counts.

Instruction No.

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NOTE-TAKING

Any notes you have taken during this trial are only aids to your memory.

The notes are not evidence. If you have not taken notes, you should rely on your

independent recollection of the evidence and not be unduly influenced by the notes of other

jurors. Notes are not entitled to any greater weight than the recollections or impressions of each

juror about the testimony.

Instruction No.

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CONSIDERATION OF ALL EVIDENCE REGARDLESS OF WHO PRODUCED

In detennining whether any fact has been proved, you should consider all of the evidence

bearing on the question regardless of who introduced it.

Instruction No. 7

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LIMITED PURPOSE OF EVIDENCE

You wil recall that during the course of this trial I instructed you that I admitted certain

evidence for a limited purpose. You must consider this evidence only for the limited purose for

which it was admitted.

Instruction No.

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WEIGHING THE EVIDENCE

You should use common sense in weighing the evidence and consider the evidence in

light of your own observations in life.

In our lives, we often look at one fact and conclude from it that another fact exists. In law

we call this "inference." A jury is allowed to make reasonable inferences. Any inference you

make must be reasonable and must be based on the evidence in the case.

Instruction No.

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DEFINITION OF "DIRECT" AND "CIRCUMSTANTIAL" EVIDENCE

You may have heard the phrases "direct evidence" and "circumstantial evidence." Direct

evidence is proof that does not require an inference, such as the testimony of someone who

claims to have personal knowledge of a fact. Circumstantial evidence is proof of a fact, or a

series of facts, that tends to show that some other fact is true.

As an example direct evidence that it is raining is testimony from a the witness who says

I was outside a minute ago and I saw it raining. Circumstantial evidence that it is raining is the

observation of someone entering a room carrying a wet umbrella.

The law makes no distinction between the weight to be given to either direct or

circumstantial evidence. You should decide how much weight to give to any evidence. In

reaching your verdict, you should consider all the evidence in the case, including the

circumstantial evidence.

Instruction No. 10

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TESTIMONY OF WITNESSES (DECIDING WHAT TO BELIEVE)

You must decide whether the testimony of each of the witnesses is truthful and

accurate, in part, in whole, or not at all. You also must decide what weight, if any, you give to

the testimony of each witness.

In evaluating the testimony of any witness, including any party to the case, you may

consider, among other things:

the ability and opportnity the witness had to see, hear, or know the

things that the witness testified about;

the witness s memory;

any interest, bias, or prejudice the witness may have;

the witness s intelligence;

the manner of the witness while testifyng;

and the reasonableness ofthe witness s testimony in light of all the

evidence in the case.

Instruction No. 11

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LAWYER INTERVIEWING WITNESS; RETENTION OF LITIGATION

CONSUL T ANTS AND EXPERTS

It is proper for a lawyer to meet with any witness in preparation for trial.

It is also proper for an attorney, party, or witness to retain, and consult with, experts and

litigation consultants in preparation for trial.

Instruction No. 12

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NUMBER OF WITNESSES

You may find the testimony of one witness or a few witnesses more persuasive than the

testimony of a larger number. You need not accept the testimony of the larger number of

witnesses.

Instruction No. 13

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PRIOR INCONSISTENT STATEMENTS OR ACTS

You may consider statements given by the SEC, James Koenig, or a witness under oath

before trial as evidence of the truth of what the witness said in the earlier statements, as well as

in deciding what weight to give that witness s testimony.

With respect to other witnesses, the law is different. If you decide that, before the trial

one of these witnesses made a statement not under oath or acted in a maner that is inconsistent

with the witness s testimony here in court, you may consider the earlier statement or conduct

only in deciding whether the witness s testimony here in court was true and what weight to give

to that testimony here in court.

In considering prior inconsistent statements or conduct, you should consider whether it

was simply an innocent error or an intentional falsehood and whether it concerns an important

fact or an unimportant detail.

Instruction No. 

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IMPEACHMENT OF A WITNESS

A witness may be discredited or "impeached" by contradictory evidence, by, among other

things, a showing that he or she testified falsely concerning a material matter, or by evidence that

at some other time the witness has said or done something that is inconsistent with the witness

testimony.

If you believe that any witness has been impeached, then you must detennine whether to

believe the witness s testimony in whole, in part, or not at all, and how much weight to give to

that testimony.

Instruction No. 15

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ABSENCE OF EVIDENCE

The law does not require any party to call as a witness every person who might have

knowledge of the facts related to this trial. Similarly, the law does not require any party to

present as exhibits all papers and things mentioned during this trial.

Instruction No. 16

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EXPERT WITNESSES

You have heard witnesses give opinions about matters requiring special knowledge or

skil. You should judge this testimony in the same way that you judge the testimony of any other

witness. The fact that such person has given an opinion does not mean that you are required to

accept it. Give the testimony whatever weight you think it deserves, considering the reasons

given for the opinion, the witnesses' qualifications, and all ofthe other evidence in the case.

Instruction No. 

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DEMONSTRATIVE EXHIBITS

Certain demonstrative exhibits have been shown to you, such as, for example, pictures

diagrams, and chars, which took the fonn, in certain instances, of boards placed on easels and

slides projected on the screen. Those are used for convenience and to help explain the facts of

the case. They are not themselves evidence or proof of any facts.

Instruction No. 18

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NO NEED TO CONSIDER REMEDIES

Your job is to detennine whether Mr. Koenig is liable for violating the federal securities

laws. It wil be my job to decide what relief, if any, should be awarded against him. That wil be

my job if you find him liable. In considering whether he is or is not liable, you should not

speculate as to what relief I might award.

Instruction No. 

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BURDEN OF PROOF

When I say the "Securities and Exchange Commission" or the "SEC" or the "plaintiff'

must prove something by "a preponderance of the evidence " or when I use the expression "

you find" or "if you decide " this is what I mean: When you have considered all the evidence in

the case, you must be persuaded that it is more probably tre than not true.

Instruction No. 

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SECTION 10(B) - FALSE OR MISLEADING STATEMENTS OR OMISSIONS - ELEMENTS

In order to meet its burden of proving that Mr. Koenig violated Section 1 D(b) or

Rule lOb- , the SEC must establish by a preponderance of the evidence each of the following

elements:

First, that Mr. Koenig did anyone or more of the following:

(1) employed a device, scheme, or arifice to defraud

(2) made an untre statement of a material fact or omitted to state a

material fact necessar in order to make the statements made, in the light of

the circumstances under which they are made, not misleading, or

(3) engaged in any act, practice, or course of business which operated

or would operate as a fraud or deceit upon any person.

Second, that Mr. Koenig acted with intent to defraud or with reckless disregard for

the trth.

Thrd, that Mr. Koenig s conduct was in connection with the purchase or sale of a

security.

Fourth, that Mr. Koenig used or caused to be used the mails or means and

instrmentalities of interstate commerce.

If you find that the SEC has proven all of the above elements by a preponderance of the

evidence, then you must find Mr. Koenig liable under Section 1O(b) and Rule lOb-5. If you find

that the SEC has failed to prove any ofthese elements by a preponderance, then you must find Mr.

Koenig not liable under Section 10(b) and Rule 10bI wil explain each of these concepts in more detail.

Instruction No. 21

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FIRST ELEMENT: FRAUDULENT ACT

The first element that the SEC must prove by a preponderance of the evidence is that in

connection with the purchase or sale of Waste Management securties, Mr. Koenig did anyone or

more of the following:

(1) employed a device, scheme, or arifice to defraud

(2) made an untre statement of a material fact or omitted to state a

material fact necessar in order to make the statements made, in the light of

the circumstances under which they are made, not misleading, or

(3) engaged in any act, practice, or course of business which operated

or would operate as a fraud or deceit upon any person.

A device, scheme or arifice to defraud is a plan for the accomplishment of any objective.

The law which Mr. Koenig is alleged to have violated prohibits all kinds of manipulative and

deceptive acts. Any device, scheme, or arifice to defraud, or act, practice, or course of business

which operated as a fraud or deceit must be material.

The SEC need not prove that Mr. Koenig personally made the misrepresentation or that he

omitted the material fact. It is suffcient if the SEC establishes that Mr. Koenig caused the statement

to be made or the fact to be omitted. It is not necessar for you to find that Mr. Koenig was the

actual seller or purchaser of the securities.

With regard to the alleged misrepresentations and omissions, you must detennine whether

the statement was tre or false when it was made, and, in the case of alleged omissions, whether the

omission was misleading at the time the omission occurred.

Instruction No. 

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MATERIITY

A fact stated or omitted is "material" ifthere is a substantial likelihood that a reasonable

investor would consider it important in makng an investment decision and would view it as having

significantly altered the total mix of infonnation made available.

Whether a fact stated or omitted is material is detennined in light of the circumstances

existing at the time the statement or omission occurred.

Instruction No. 23

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SECOND ELEMENT: STATE OF MID

Another element the plaintiff must establish by a preponderance of the evidence to prevail

on a Section 1 O(b) claim is that Mr. Koenig knowingly paricipated in the scheme to defraud with

intent to defraud or with reckless disregard for the trth.

Knowingly means to act intentionally and deliberately, rather than mistakenly or

inadvertently.

Intent to defraud in the context of the securties laws means to act knowingly and with the

intent to deceive.

Reckless conduct includes not merely simple or even inexcusable negligence, but an

extreme deparre from the standards of ordinary care, that presents a danger of misleading buyers

or sellers of securities which is either known to Mr. Koenig or is so obvious that he must have been

aware of it.

Instruction No. 

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TmRD ELEMENT: IN CONNECTION WITH THE SALE OR PURCHASE OF A SECURTY

Section 1 O(b) requires that Mr. Koenig s conduct be "in connection with" the sale or

purchase of a security. Although you must find that there was a purchase or sale of securties in this

case, you need not fid that Mr. Koenig actually participated in any securties transaction if Mr.

Koenig was engaged in fraudulent conduct that was "in connection with" a purchase or sale. The

in connection with" requirement is satisfied if you find that there was any connection or relation

between the allegedly fraudulent conduct and the sale or purchase of securities. Fraudulent conduct

may be "in connection with" the sale or purchase of securities if you find that the alleged fraudulent

conduct "touched upon" a securities transaction.

Instruction No. 25

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FOURTH ELEMENT: INTERSTATE COMMRCE

Plaintiff must also prove that Mr. Koenig knowingly used, or caused to be used, the means

or instrentalities of interstate commerce, or of the mails, in furtherance of the scheme to defraud

or fraudulent conduct.

It is not necessar that Mr. Koenig be directly or personally involved in any mailing or

telephone calls. Ifhe was an active parcipant in the scheme and took steps or engaged in conduct

which he knew or could reasonably foresee would naturally and probably result in the use of the

mails or interstate wires, then you may find that he caused the mails or telephones to be used.

When one does an act with the knowledge that the use of interstate means for

communcation or of the mails will follow in the ordinar course of business, or where such use can

reasonably be foreseen, even though not actually intended, then he causes such means to be used.

Nor is it necessar that the items that went through interstate commerce or the mails contain

the fraudulent material, or anything objectionable. The material sent may be entirely innocent. The

use of interstate means or the mails need not be central to the execution of the scheme, and it may

even be incidental to it. All that is required is that the use of the mails or interstate means bear some

relation to the object of the scheme or fraudulent conduct.

In fact, the actual sale or purchase need not be accompaned or accomplished by the use of

interstate means or of the mails, so long as Mr. Koenig is engaged in actions that are par of a

fraudulent scheme.

Instruction No. 26

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SECTION 17(A) OF THE SECURITIES ACT

The SEC alleges that James Koenig committed fraud in the sale or offer of securties issued

by Waste Management, Inc. in violation of Section l7(a) of the Securities Act of 1933.

In order for you to find that Mr. Koenig violated Section l7(a), the SEC must prove the

following by a preponderance of the evidence:

That, in the offer or sale of securities, Mr.Koenig:

(1) employed any device, scheme, or arifice to defraud, or

(2) obtained money or property by means of any untre statement 

a material fact or any omission to state a material fact necessar in order to make the

statements made, in the light of the circumstances under which they were made, not

misleading, or

(3) engaged in any transaction, practice, or course of business which

operates or would operate as a fraud or deceit upon the purchaser.

The elements of a violation of Section l7(a) of the Securties Act are similar to those under

Section 1O(b) of the Exchange Act. Thus, the definition of "material" under Section l7(a) is the

same as under Section 1 O(b), defined earlier in these instrctions. There are two important ways in

which Section l7(a) differs from Section 1 O(b) and Rule 10b- , however.

First, Section l7(a) only addresses conduct "in the offer or sale of securties." Section 1 O(b)

and Rule 10b- , in contrast, address conduct "in connection with the purchase or sale of securities.

Second, the state of mind required for a violation of subsection (2) or (3) of Section l7(a)

differs from that of subsection (1) of Section l7(a). To prove a violation of Section l7(a)(2) or

l7(a)(3), the SEC must prove by a preponderance of the evidence that Mr. Koenig acted with

negligence." Negligence is defined in the following instruction.

To prove a violation of Section l7(a)(1), however, the SEC must stil prove that Mr. Koenig

acted with an intent to defraud or with reckless disregard for the trth, as defined earlier in these

instructions concerning Section 1 O(b) of the Securities Exchange Act of 1934 and Rule Dbthereunder.

Instruction No. 27

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SECTION 17(A)(2)-(3) OF THE SECURITIES ACT (CONT.

To find a violation of l7(a)(2) or l7(a)(3), you must find that Mr. Koenig acted with

negligence. Negligence is the doing of some act a reasonably prudent person would not do, or the

failure to do something a reasonably prudent person would do, when prompted by considerations

that ordinarly regulate the conduct of human affairs.

Instruction No. 28

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AIDING AND ABETTING - SECTION 10(B) AND RULE 10BThe SEC claims that Mr. Koenig also violated Section 1O(b) and Rule lOb-5 of the

Exchange Act by aiding and abetting violations of those provisions committed by Waste

Management, Inc. To prove its claim of aiding and abetting, the SEC must establish each ofthe

following by a preponderance of the evidence:

(1) Waste Management committed one or more violations of Section 1 O(b) and Rule lOb-

(2) Mr. Koenig provided substantial assistance to Waste Management in violating those

provisions; and

(3) Mr. Koenig knew, or was reckless in not knowing, of Waste Management's violation

and of his role in furthering the violation.

I have previously defined for you the meanng of "reckless.

Inaction may be a fonn of "substantial assistance" if you find that the silence of the

defendant was intended to aid Waste Management in committing the violations.

A corporation is a legal entity that can act only through persons who are its agents. If you

find that Waste Management violated Section 1 O(b) and Rule 10b- , only then should you consider

whether Mr. Koenig played a role in that violation.

If you find that the SEC has proven all of the above elements by a preponderance of the

evidence, then you must find Mr. Koenig liable for aiding and abettng a violation of Section 1 D(b )

and Rule 10b-5. If you find that the SEC has failed to prove any of these elements by a

preponderance, then you must find Mr. Koenig not liable for aiding and abettng a violation of

Section lO(b) and Rule 10bInstruction No. 29

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AIDING AND ABETTING -- SECTION 17(A)

The SEC claims that Mr. Koenig violated Section l7(a) ofthe Securties Act by aiding and

abetting violations of those provisions committed by Waste Management, Inc. To prove its claim

of aiding and abetting, the SEC must establish each of the following by a preponderance of the

evidence:

(1 ) Waste Management committed one or more violations of Section l7(a);

(2) Mr. Koenig provided substantial assistance to Waste Management in violating those

provisions; and

(3) Mr. Koenig knew, or was reckless in not knowing, of Waste Management's violation

and of his role in furthering the violation.

I previously defined for you the meaning of "reckless.

Inaction may be a fonn of "substantial assistance" if you find that the silence of the

defendant was intended to aid Waste Management in committing the violations.

A corporation is a legal entity that can act only through persons who are its agents. If you

find that Waste Management violated Section l7(a), only then should you consider whether Mr.

Koenig played a role in that violation.

If you find that the SEC has proven all of the above elements by a preponderance of the

evidence, then you must find Mr. Koenig liable for aiding and abetting a violation of Section l7(a).

If you find that the SEC has failed to prove any ofthese elements by a preponderance, then you

must find Mr. Koenig not liable for aiding and abetting a violation of Section l7(a).

Instruction No. 30

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AIDING AND ABETTING- SECTION 13(A) - FILING FALSE PERIODIC REpORTS

The SEC claims that Mr. Koenig aided and abetted Waste Management' s violations of

Section 13(a) of the Exchange Act and Rules l2b- , 13a- , and 13a- , by filing materially

false reports with the SEC.

Companies must file periodic reports with the SEC. Section 13(a) and Rules 13a-l and

l3a- 13 require that issuers make those reports factually accurate and not omit material

infonnation that would otherwise make the infonnation in the reports not misleading. Rule l2b20 provides that in addition to the infonnation expressly required to be included in a statement or

report, the issuer shall add such further material infonnation as may be necessary to make the

required statements, in the light of the circumstances under which they are made, not misleading.

I have defined "material" earlier in these instructions.

To prove its claim of aiding and abetting, the SEC must establish each of the following by

a preponderance of the evidence:

(1) Waste Management committed one or more violations of Section 13(a) of the

Exchange Act and Rules l2b- , 13a- , 13a- 13;

(2) Mr. Koenig provided substantial assistance to Waste Management in violating those

provisions; and

(3) Mr. Koenig knew, or was reckless in not knowing, of Waste Management' s violation

and of his role in furthering the violations.

I previously defined for you the meaning of "reckless.

Inaction may be a fonn of "substantial assistance" if you find that the silence of the

defendant was intended to aid Waste Management in committing the violations.

A corporation is a legal entity that can act only through persons who are its agents. If you

find that Waste Management violated Section 13(a) and Rules l2b- , 13a- , and 13a- , only then

should you consider whether Mr. Koenig played a role in that violation.

If you find that the SEC has proven all of the above elements by a preponderance of the

evidence, then you must find Mr. Koenig liable for aiding and abettng a violation of Section 13(a)

and Rules l2b- , 13a- and 13a- 13. If you find that the SEChas failed to prove any of these

elements by a preponderance, then you must find Mr. Koenig not liable for aiding and abetting a

violation of Section 13(a) and Rules l2b- , 13a- , and 13a- 13.

Instruction No. 31

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AIDING AND ABETTING - SECTION 13 (B) (2) (A) - FALSIFICATION OF BOOKS AND RECORDS

The SEC claims that Mr. Koenig aided and abetted Waste Management' s violations of

Section 1 3 (b)(2)(A) of the Exchange Act by falsifyng the books and records of Waste

Management.

Section 13(b)(2)(A) requires that companies subject to the Exchange Act's reporting

requirements make and keep books, records, and accounts, which, in reasonable detail

accurately and fairly reflect the transactions and dispositions ofthe assets of the company. The

Exchange Act defines the tenn "records" to mean accounts, correspondence, memorandums

tapes, discs, papers, books, and other documents or transcribed infonnation of any type, whether

expressed in ordinary or machine language. "Reasonable detail" means the level of detail as

would satisfy prudent officials in the conduct of their own affairs.

To prove its claim of aiding and abetting, the SEC must establish each of the following by

a preponderance of the evidence:

(1) Waste Management committed one or more violations of Section 1 3 (b)(2)(A) of the

Exchange Act;

(2) Mr. Koenig provided substantial assistance to Waste Management in violating that

section; and

(3) Mr. Koenig knew, or was reckless in not knowing, of Waste Management' s violation

and of his role in furthering the violation.

I previously defined for you the meanng of "reckless.

Inaction may be a fonn of "substantial assistance" if you find that the silence of the

defendant was intended to aid Waste Management in committing the violations.

A corporation is a legal entity that can act only through persons who are its agents. If you

find that Waste Management violated Section l3(b )(2)(A), only then should you consider whether

Mr. Koenig played a role in that violation.

If you find that the SEC has proven all of the above elements by a preponderance of the

evidence, then you must find Mr. Koenig liable for aiding and abettng a violation of Section

13 (b)(2)(A). If you find that the SEC has failed to prove any of these elements by a preponderance

then you must find Mr. Koenig not liable for aiding and abetting a violation of Section l3(b )(2)(A).

Instruction No. 32

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RULE 13B2- OF THE EXCHAGE ACT

The SEC claims that Mr. Koenig violated Rule l3b2-l of the Exchange Act. The SEC

must show by a preponderance ofthe evidence that Mr. Koenig, directly or indirectly, falsified

or caused to be falsified, any book, record, or account of Waste Management.

As I previously instructed you, Section 13(b )(2)(A) requires that companies subject to the

Exchange Act's reporting requirements make and keep books , records, and accounts, which, in

reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of

the company. The Exchange Act defines the tenn "records" to mean accounts, correspondence

memorandums, tapes, discs, papers, books, and other documents or transcribed infonnation of

any type, whether expressed in ordinary or machine language. "Reasonable detail" means the

level of detail as would satisfy prudent officials in the conduct of their own affairs.

Under Rule l3b2- , books, records, and accounts must have been made and kept, which

in reasonable detail, accurately and fairly reflected the transactions and dispositions of the assets

of Waste Management.

Instruction No. 33

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RULE 13B2-2 OF THE EXCHAGE ACT - LYIG TO AUDITORS

The SEC alleges that James Koenig lied to the auditors of Waste Management in violation

of Rule l3b2-2 of the Exchange Act.

It is a violation of Rule 13b2-2 for any director or offcer of Waste Management, directly or

indirectly, to make, or cause to be made, a materially false or misleading statement, or to omit to

state, or cause another person to omit to state, any material fact necessar in order to make

statements made, in light of the circumstances under which they were made, not misleading

to any auditor in connection with an audit, review or examination of Waste Management's

financial statements required to be made pursuant to the rules and regulations of the Exchange Act

or the preparation or filing of any document or report required to be filed with the SEC.

I have previously instructed you on what is a false or misleading statement or omission

and what material means.

Instruction No. 34

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SUMRIES

Exhibits 3210, 4294, 4295 , 4296, and 4297 are summares of documents, records , or

books. It is up to you to decide if each of these summares is accurate. You should consider

these summaries just like all of the other evidence in the case.

Instruction No. 35

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LIMITED PURPOSE OF EVIDENCE

The following exhibits, which were admitted through the videotaped testimony of

Robert "Steve" Miler, should be considered only for the limited purpose of showing Mr.

Miler s state of mind, and should not be considered for the truth of the matters discussed

therein: 1230, 1267, 1277, 1278, 1279, 1280, 1281 , 1282, 1283, 1286, 1287, 1288, 1289

1538 1540, and 1549.

The following exhibits, which were admitted during the testimony of Jeffrey

Stahl, should be considered only for the limited purposes of (1) showing Arhur

Andersen s state of mind, and (2) proving that the documents exist, and should not be

considered for the truth ofthe matters discussed therein: 627, 889, 890, 956, 967, 1087

1088, and 1091.

Exhibit 954, which was admitted during the testimony of Wanda Wallace, should

be considered only for the limited purpose of detennining what Dr. Wallace used to reach

her opinions in this matter, and should not be considered for the trth of the matters

discussed therein.

Exhibits 82, 354, 860, 863 , 865 , and 870, which were admitted during the

videotaped testimony on Ronald LeMay, should be considered only for the limited

purpose of understanding what was in Mr. LeMay s mind, and should not be considered

for the truth of the matters discussed therein.

Exhibit 181 , which was admitted durng the testimony of J ames Koenig, should

be considered only for the limited purposes of showing that (1) Mr. Koenig received it

and (2) Mr. Koenig had notice of it, but should not be considered for the truth of the

matters discussed therein.

Exhibit 344, which was admitted during the testimony of Herbert Getz, should be

considered only for the limited purpose of showing what was in Mr. Getz s mind after he

left the July 1997 meeting with Mr. Sanford, and should not be considered for the truth of

the matters discussed therein.

Exhibit 488, which was admitted during the videotaped testimony of John Riley,

should be considered only for the limited purpose of showing what was in Mr. Riley

mind when he reached the conclusions he reached, and should not be considered for the

truth of the matters discussed therein.

Exhibit 1228, which was admitted during the testimony of Ronald Skwarek

should be considered only for the limited purpose of explaining Arhur Andersen s state

of mind and Skwarek' s state of mind and the position of the Company at that time.

Exhibits 4176, 4201 , 4204, 4215, 4221 , 4236, 4238, 4240, 4241 , 4242, 4246

4250 4253 4254, and 4258 , which were admitted during the testimony of Kenneth

McGraw, should be considered only for the limited purpose of detennining what Mr.

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McGraw used to reach his opinions in this matter, and should not be considered for the

truth of the matters discussed therein.

Exhibits 2071 , 2072, and 3218, which were admitted at the end ofthe trial, should

be considered only for the limited purpose of showing what was being said in the market

at the time each was published, and should not be considered for the truth of the matters

discussed therein.

Exhibits 3216 and 3217, which were admitted at the end of the trial, should be

considered only for the limited purpose of showing what infonnation was available to the

public at the time each was published, and should not be considered for the truth of the

matters discussed therein.

Instruction No. 36

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SELECTION OF FOREPERSON; FORMS OF VERDICT

Upon retiring to the jury room, you must select a foreperson. The foreperson wil preside

over your deliberations and wil be your representative here in Court.

Fonns of verdict have been prepared for you.

Take these fonns to the jury room, and when you have reached unanimous agreement on

the verdict, your foreperson wil fill in and date the appropriate fonn, and all of you wil sign it.

Instruction No. 37

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COMMUNICA TION WITH THE COURT

I do not anticipate that you wil need to communicate with me. If you do need to

communicate with me, the only proper way is in writing. The writing must be signed by the

presiding juror, or, ifhe or she is unwiling to do so, by some other juror. The writing should be

given to the marshal, who wil give it to me. I wil respond either in writing or by having you

return to the courtroom so that I can respond orally.

If you do communicate with me, you should not indicate in your note what your

numerical division is, if any.

Instruction No. 

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DISAGREEMENT AMONG JURORS

The verdict must represent the considered judgment of each juror. Your verdict must be

unammous.

You should make every reasonable effort to reach a verdict. In doing so, you should

consult with one another, express your own views, and listen to the opinions of your fellow

jurors. Discuss your differences with an open mind. Do not hesitate to re-examine your own

views and change your opinion if you come to believe it is wrong. But you should not surrender

your honest beliefs about the weight or effect of evidence solely because of the opinions of other

jurors or for the purpose of returning a unanimous verdict.

All of you should give fair consideration to all the evidence and deliberate with the goal

of reaching a verdict which is consistent with the individual judgment of each juror. You are

impartial judges of the facts.

Instruction No. 39

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VERDICT FORM

A. Section 10(b) of the Securities Exchange Act of 1934 and

Rule 10b-5 Promulgated Thereunder

SECURTIES FRAUD

1. Did James E. Koenig violate Section 1 O(b) of the Securities Exchange Act of 1934 and

Rule 1 Ob- 5 promulgated thereunder?

Yes: No:

If your answer to Question 1 is "Yes " please indicate below the period or periods in

which James E. Koenig violated Section lO(b) and Rule lOb-5 by marking "yes" next to

those periods, or " " next to the period or periods in which there was not a violation.

Otherwise, please proceed to Question 2 on the next page.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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B. Section 17(a)(1) ofthe Securities Act of 1933

SECURTIES FRAUD

2. Did James E. Koenig violate Section 17(a)(I) of the Securities Act of 1933?

Yes: No:

If your answer to Question 2 is "Yes " please indicate below the period or periods in

which James E. Koenig violated Section 17(a)(I) by marking "yes" next to those periods

or " " next to the period or periods in which there was not a violation. Otherwise

please proceed to Question 3 on the next page.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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C. Section 17(a)(2) of the Securities Act of 1933

SECURTIES FRAUD

Did James E. Koenig violate Section 17(a)(2) of the Securities Act of 1933?

Yes: No:

If your answer to Question 3 is "Yes " please indicate below the period or periods in

which James E. Koenig violated Section 17(a)(2) by marking "yes" next to those periods

or " " next to the period or periods in which there was not a violation. Otherwise

please proceed to Question 4 on the next page.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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D. Section 17(a)(3) of the Securities Act of 1933

SECURTIES FRAUD

Did James E. Koenig violate Section 17(a)(3) of the Securities Act of 1933?

Yes: No:

If your answer to Question 4 is "Yes " please indicate below the period or periods in

which James E. Koenig violated Section 17(a)(3) by marking "yes" next to those periods

or " " next to the period or periods in which there was not a violation. Otherwise

please proceed to Question 5 on the next page.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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E. Aiding and Abetting Section 10(b) of the Securities Exchange Act of 1934 and

Rule 10b-5 Promulgated Thereunder

AIDING AND ABETTING COMPANY' S SECURITIES FRAUD

5. Did James E. Koenig aid and abet one or more violations by Waste Management, Inc. of

Section lO(b) ofthe Securities Exchange Act of 1934 and Rule lOb-5 promulgated

thereunder?

Yes: No:

If your answer to Question 5 is "Yes " please indicate below the period or periods in

which James E. Koenig aided and abetted Waste Management's violation of Section

lO(b) and Rule lOb-5 by marking "yes" next to those periods, or " " next to the period

or periods in which there was no aiding and abetting of a violation. Otherwise, please

proceed to Question 6 on the next page.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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F. Aiding and Abetting Sections 17(a) of the Securities Act of 1933

AIDING AND ABETTING COMPANY' S SECURTIES FRAUD

6. Did James E. Koenig aid and abet one or more violations by Waste Management, Inc. of

Section 17(a) of the Securities Act of 1933?

Yes: No:

If your answer to Question 6 is "Yes " please indicate below the period or periods in

which James E. Koenig aided and abetted Waste Management's violation of Section

17(a) by marking "yes" next to those periods, or " " next to the period or period in

which there was no aiding and abetting of a violation. Otherwise, please proceed to

Question 7 on the next page.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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G. Aiding and Abetting Section 13(a) of the Securities Exchange Act of 1934 and Rules

12b- , 13a- , and 13a-13 Promulgated Thereunder

AIDING AND ABETTING COMPANY' S FALSE SEC FILINGS

Did James E. Koenig aid and abet one or more violations by Waste Management, Inc. of

Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b- , 13a- , and 13a13 promulgated thereunder?

Yes: No:

If your answer to Question 7 is "Yes " please indicate below the period or periods in

which James E. Koenig aided and abetted Waste Management' s violation of Section

13(a) and Rules 12b- , 13a- , and 13a- 13 by marking "yes" next to those periods, or

" next to the period or periods in which there was no aiding and abetting of a

violation. Otherwise, please proceed to Question 8 on the next page.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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H. Aiding and Abetting Section 13(b )(2)(A) of the Exchange Act of 1934

AIDING AND ABETTING COMPANY'S FALSIFICATION OF BOOKS AND

RECORDS

Did James E. Koenig aid and abet one or more violations by Waste Management, Inc. of

Section 13(b )(2)(A) of the Securities Exchange Act of 1934?

Yes: No:

If your answer to Question 8 is "Yes " please indicate below the period or periods in

which James E. Koenig aided and abetted Waste Management's violation of Section

13(b )(2)(A) by marking "yes" next to those periods, or " " next to the period or periods

in which there was no aiding and abetting of a violation. Otherwise, please proceed to

Question 9 on the next page.

(a) 1992 - Annual Yes: No:

(b) 1993 - Annual Yes: No:

(c) 1994 - Annual Yes: No:

(d) 1995 - Second Quarer Yes: No:

(e) 1995 - Third Quarer Yes: No:

(f) 1995 - Annual Yes: No:

(g) 1996 - First Quarer Yes: No:

(h) 1996 - Second Quarer Yes: No:

(i) 1996 - Third Quarer Yes: No:

(j) 1996 - Annual Yes: No:

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I. Rule 13b2-1 of the Securities Exchange Act of 1934

FALSIFYING BOOKS AND RECORDS

9. Did James E. Koenig violate Rule 13b2- 1 promulgated under the Securities Exchange

Act of 1934?

Yes: No:

If your answer to Question 9 is "Yes " please indicate below the period or periods in

which James E. Koenig violated Rule 13b2- 1 by marking "yes" next to those periods, or

" next to the period or periods in which there was not a violation. Otherwise, please

proceed to Question 10 on the next page.

(a) 1992 - Annual Yes: No:

(b) 1993 - Annual Yes: No:

(c) 1994 - Annual Yes: No:

(d) 1995 - Second Quarer Yes: No:

(e) 1995 - Third Quarter Yes: No:

(f) 1995 - Annual Yes: No:

(g) 1996 - First Quarer Yes: No:

(h) 1996 - Second Quarer Yes: No:

(i) 1996 - Third Quarer Yes: No:

(j) 1996 - Annual Yes: No:

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J. Rule 13b2- of the Securities Exchange Act of 1934

LYING TO AUDITORS

10. Did James E. Koenig violate Rule 13b2-2 promulgated under the Securities Exchange

Act of 1934?

Yes: No:

If your answer to Question 10 is "Yes " please indicate below the period or periods in

which James E. Koenig violated Rule 13b2-2 by marking "yes" next to those periods, or

" next to the period or periods in which there was not a violation.

(a) 1992 Yes: No:

(b) 1993 Yes: No:

(c) 1994 Yes: No:

(d) 1995 Yes: No:

(e) 1996 Yes: No:

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The jury reached the above answers unanimously.

Signed:

Foreperson

Dated:

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CERTIFICA TE OF SERVICE

Sarah R. Wolff, state that on June 29 2006 , I electronically filed the foregoing JURY

INSTRUCTIONS AND VERDICT FORM SUBMITTED TO THE JUY with the Clerk of

the Court using the ECF system which wil send notification of such filings to the following:

John D. Worland, Jr. , Esq.

Securities and Exchange Commission

450 Fifth Street, N.

Mail Stop 9-

Washington, DC 20549-0808

worlandi (f sec. gov 

John E. Birkenheier, Esq.

United States Securities and Exchange

Commssion

175 W. Jackson Boulevard

Suite 900

Chicago, IL 60604

birkenheierg (f sec. gov

Counsel for Plaintiff

Counsel for Plaintiff

s/Sarah R. Wolff

Sarah R. Wolff (Bar No. 3123733)

Jonathan S. Quinn (Bar No. 6200495)

Matthew J. O'Hara (Bar No.6237795)

Christopher R. Clark (Bar No. 6236859)

SACHNOFF & WEAVER, LTD.

10 South Wacker Drive

Chicago, IL 60606

(312) 207- 1000

swolff(f sachnoff.com

Attorneys for Defendant James E. Koenig

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