The Scandal Have Paid For Their Unethical Behavior

850 Words Jan 28th, 2016 4 Pages
Punishment
Those who were responsible for the scandal have paid for their unethical behavior. Kozlowski and Swartz were accused of giving themselves more than $150 million in illegal bonuses and forgiving loans to themselves, besides fraudulently selling an additional $430 million in the company’s stock options. Kozlowski and Swartz were convicted on 22 counts of grand larceny, falsifying business records, securities fraud and conspiracy, sentenced from eight and one-third years to twenty-five years in prison, and ordered by State Supreme Court Justice Michael Obus to pay a total of $134 million in restitution, in addition of $70 million and $35 million fines respectively (Associated Press, "Ex-Tyco Executives…"). Belnick, the former general counsel, shelled out $100,000 to settle charges with the U.S. Securities and Exchange Commission over $14 million in undisclosed loans. Federal regulators imposed heavy sanctions against Richard Scalzo, a partner at PricewaterhouseCoopers, over his auditing work at troubled Tyco International Ltd., by permanently barring him from conducting public company audits (Countryman, "SEC Bans...").
Although the Tyco scandal has been attributed solely to Kozlowski’s character flaws, the industrial conglomerate was also alleged by the Securities and Exchange Commission due to the failed corporate governance and a weak board, and agreed to pay “a $50 million civil penalty to settle allegations the high-tech conglomerate’s prior management violated…
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