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    Tyco Scandal

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    Jeraldine Cerdan
    Former Tyco CEO Dennis Kozlowski and CFO Mark Swartz were accused of stealing over $600 million from Tyco through questionable accounting practices and fraudulent loans. An investigation revealed they had misstated Tyco's finances and profits. Both pled guilty and were later convicted at trial in 2005, receiving prison sentences. The scandal severely damaged Tyco's reputation and performance, and led to a $2.92 billion class action settlement for cheated shareholders.

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    Tyco Scandal

    Uploaded by

    Jeraldine Cerdan
    97 views5 pages
    Former Tyco CEO Dennis Kozlowski and CFO Mark Swartz were accused of stealing over $600 million from Tyco through questionable accounting practices and fraudulent loans. An investigation revealed they had misstated Tyco's finances and profits. Both pled guilty and were later convicted at trial in 2005, receiving prison sentences. The scandal severely damaged Tyco's reputation and performance, and led to a $2.92 billion class action settlement for cheated shareholders.

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    Original Title

    TYCO SCANDAL (1)

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    Former Tyco CEO Dennis Kozlowski and CFO Mark Swartz were accused of stealing over $600 million from Tyco through questionable accounting practices and fraudulent loans. An investigation revealed they had misstated Tyco's finances and profits. Both pled guilty and were later convicted at trial in 2005, receiving prison sentences. The scandal severely damaged Tyco's reputation and performance, and led to a $2.92 billion class action settlement for cheated shareholders.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    97 views5 pages

    Tyco Scandal

    Uploaded by

    Jeraldine Cerdan
    Former Tyco CEO Dennis Kozlowski and CFO Mark Swartz were accused of stealing over $600 million from Tyco through questionable accounting practices and fraudulent loans. An investigation revealed they had misstated Tyco's finances and profits. Both pled guilty and were later convicted at trial in 2005, receiving prison sentences. The scandal severely damaged Tyco's reputation and performance, and led to a $2.92 billion class action settlement for cheated shareholders.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    TYCO

    SCANDAL
    PRESENTED BY GROUP 3
    BACKGROUND OF THE
    COMPANY
    The Tyco International scandal refers to
    the 2002 theft by former company CEO
    and Chairman Dennis Kozlowski and
    former corporate Chief Financial Officer
    Mark Swartz of as much as $600 million
    from the firm. The scandal turned into a
    long, drawn out trial as the two accused
    men vigorously denied any wrongdoing
    and fought the charges vehemently.
    WHAT WENT DOWN?
    According to the Commission's complaint, Tyco overstated its operational income by at least $500 million as a result of
    questionable accounting methods used in connection with some of the several acquisitions it made during that time. The
    three men were led into court in handcuffs and later pleaded not guilty in New York State Supreme Court. Kozlowski was
    released on $100 million bail while Swartz's bail was set at $50 million. The assets of both men, about $600 million, were
    frozen by a restraining order obtained by the state. Belnick was released on a $1 million bond. Hours after the accusations
    were made public by Manhattan District Attorney Robert Morgenthau, Kozlowski and Swartz pleaded guilty. They were
    accused of stealing $170 million in business loans and other funds, as well as more than $430 million through fraudulent
    securities sales.Prosecutors and federal authorities are currently looking into the books of several significant firms,
    including Tyco, Enron Corp., WorldCom Inc., and Adelphia Communications. The final three businesses have requested
    Chapter 11 bankruptcy protection from creditors.
    WHAT WAS THE VERDICT?
    Court proceedings proved that former company CEO and Chairman Dennis Kozlowski
    and former corporate Chief Financial Officer Mark Swartz stole millions of dollars from
    Tyco and that their illegal financial transactions were extensive. Kozlowski and CFO
    Mark Swartz were convicted and imprisoned in 2005. In the aftermath of the scandal,
    Tyco's business performance declined and investors lost confidence in the company. A
    class action lawsuit followed the Tyco International scandal criminal trial with a verdict
    handed down by Federal District Court Judge Paul Barbadoro in May of 2007. Tyco
    consented to pay out $2.92 billion to a class of cheated shareholders.
    REFERENCES
    https://money.cnn.com/2002/0
    9/12/news/companies/kozlows
    ki/index.htm

    https://panmore.com/tyco-
    corporate-scandal-2002-case-
    analysis

    https://www.financial-
    dictionary.info/terms/tyco-
    international-scandal/

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