Tyco

2334 Words10 Pages
Tyco International | Week 8 Final Project | | | 4/26/2013 | On September 12, 2002, national television showcased Tyco International’s former chief executive officer (CEO) L. Dennis Kozlowski and former chief financial officer (CFO) Mark H. Swartz in handcuffs after being arrested and charged with misappropriating more than $170 million from the company. They were also accused of stealing more than $430 million through fraudulent sales of Tyco stock and concealing the information from shareholders. The two executives were charged with more than thirty counts of misconduct, including grand larceny, enterprise corruption, and falsifying business records. Another executive, former general counsel Mark A. Belnick, was charged…show more content…
After Fort’s departure, Dennis Kozlowski was appointed the new CEO of Tyco International. With a new lifestyle – parties and multiple homes in Boca Raton, Nantucket, Beaver Creek and New York City – and an aggressive management style, he appeared to be following in the footsteps of his mentor, former CEO Joseph Gaziano. In early 2002, Kozlowski announced Tyco’s split of its four divisions into independent, publicly traded companies: Security and Electronics, Healthcare, Fire Protection and Flow Control, and Financial Services. Soon after, everything began to crumble. The board of directors learned that Frank Walsh (one of its members) had received a $20 million commission for his part in securing and aiding the CIT merger, without the knowledge of the rest of the board. Walsh was fined and later resigned. The board members were troubled by the notion that Kozlowski had made a major payment without informing them so they launched an investigation into whether the other board members had earned such commissions. The investigation uncovered numerous expense abuses. Also in 2002, the New York State Bank Department observed large sums of moving in and out of Tyco’s account. What made this unusual was that the funds were being transferred into Kozlowski’s personal accounts. Authorities discovered that Kozlowski had sought to avoid around $1 million in New York state import taxes. After purchasing around $14 million in rare artwork, Kozlowski had the

More about Tyco

Open Document