Tyco to Pay $50-Million SEC Penalty
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Tyco International Ltd. agreed Monday to pay the Securities and Exchange Commission a $50-million civil penalty to settle allegations the high-tech conglomerate’s previous management violated securities laws, cooked the books and overstated financial results by at least $1 billion.
Under the proposed settlement, filed in U.S. District Court in New York, the SEC’s enforcement division will decide how to distribute the $50 million to harmed investors, instead of the government keeping it all, said James Coffman, assistant director of the division.
Coffman said his division was still investigating other people who may have been involved in the fraud.
The SEC’s civil complaint says the accounting fraud and other violations occurred from 1996 through mid-2002. That’s when former Chief Executive L. Dennis Kozlowski snapped up more than 700 companies, trying to turn little-known Tyco into a global manufacturing and services powerhouse with perpetual earnings growth.
“In addition to looting the company, Tyco’s Kozlowski-era management lied about the company’s financial results,” Linda Chatman Thomsen, the SEC’s enforcement director, said in a statement.
Shares of Tyco fell 8 cents Monday to $25.93.
Tyco is based in Pembroke, Bermuda.
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