[JURIST] A New York appellate court unanimously upheld [opinion] the convictions of former Tyco International [corporate website] CEO L. Dennis Kozlowski [JURIST news archive] and former CFO Mark Swartz Thursday, rejecting arguments that the pair had been convicted of grand larceny, securities fraud and falsifying business records [JURIST report] on insufficient evidence. The court affirmed their eight to 25-year prison sentences [JURIST report] and fines of $70 million for Kozlowski and $35 million for Swartz. Lawyers for the two said they would try to appeal to the New York Court of Appeals [official website], New York's top court. Last month, Corporate Officers & Directors Insurance (CODA), a subsidiary of ACE Bermuda, filed a petition [JURIST report] in a New York trial court requesting an order compelling Kozlowski to pay the insurer approximately $1.97 million. CODA provided directors and officers liability insurance to Kozlowski, and won an arbitration award in the UK for recovery of money paid in legal fees to the former executive.
Tyco suffered one of the most infamous corporate fraud scandals [JURIST news archive] in modern times when Kozlowski and Swartz were found guilty of looting the company and defrauding its shareholders out of more than $150 million in unauthorized personal compensation. Tyco settled SEC charges [JURIST report] of fraudulent accounting in April 2006 for $50 million. In July, a federal judge gave preliminary approval [JURIST report] to a $3.2 billion settlement agreement [JURIST report] between Tyco International, Tyco's former auditor PricewaterhouseCoopers [corporate website], and investors who were harmed by fraudulent accounting practices orchestrated by Tyco's former top executives. Bloomberg has more.