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Tyco

In: Business and Management

Submitted By enna71
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NHBR: 30 years and counting: Tyco scandal and its aftermath
By Kenny, Jack
Publication: New Hampshire Business Review
Date: Friday, October 10 2008

No petty thieves, Tyco International Ltd. chief executive Dennis Kozlowski and chief financial officer Mark Swartz took over $170 millions in "loans" from the company without the shareholders knowledge. A Securities and Exchange Commission investigation in 2002 also found the pair had made more than $400 million in stock sales without disclosure.
All told, losses from fraudulent practices were estimated at $600 million.
Kozlowski and Swartz both resigned in the summer of 2002. On June 17, 2005, a Manhattan jury found both men guilty of stealing more than $150 million from Tyco, a conglomerate that at the time of the crimes was based in Exeter.
Kozlowski, whose name will long be associated with the $6,000 shower curtain and a $2 million birthday party, obviously had big dreams and large ambitions. But he never imagined the kind of house he would be living in when he was interviewed by Morley Safer of CBS's 60 Minutes" in March of last year.
"In my wildest imagination, when I would project myself into my late 50s and early 60s, where I would be or what I would be doing. If I make a list of a hundred different places, or a hundred different things, here would never make that list," Kozlowski told Safer.
He was speaking from his residence at the Mid-State Correctional Facility in the state of New York. As "60 Minutes" noted, 'Guests' at the facility include murderers, drug dealers and pedophiles and the odd multi-millionaire."
But one result of the Tyco misfortune was a $5 million settlement with the state Bureau of Securities Regulation by the company's board of directors on charges related to the scandals. The settlement was used to fund the Initiative for Corporate Responsibility and Investor Protection,...

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