Former Kmart chief ordered to pay millions for misleading investors

Detroit A judge on Thursday ordered former Kmart CEO Charles Conaway to pay more than $10 million for misleading investors before the retail chain filed for bankruptcy protection in 2002.

However, the judge denied an SEC request that would have prevented Conaway from serving as an officer or director at another public company. The decision was issued nearly nine months after Conaway was found liable in a federal civil trial.

Financial penalties for Conaway include a $5 million loan he received from Kmart's board, a loan that was subsequently forgiven. The judge tacked on $2.7 million in interest for the loan, but that figure will grow when it is calculated through December 2009.

Conaway's lawyer said the jury's verdict and the financial penalties will be appealed.