Tyco settles securities fraud lawsuit with New Jersey for $73 million Mike Rosen-Molina at 12:05 PM ET
[JURIST] Tyco International [corporate website] Wednesday reached an agreement with the state of New Jersey to settle a lawsuit [case materials] alleging that insider trading at the company cost the state $100 million in state employee pension funds. Under the settlement terms, Tyco will pay $73 million to New Jersey and claims will be dropped against Tyco chief legal officer Mark Belnick and directors Richard Bodman, John Fort III, James Pasman Jr. and Wendy Lane. Claims against former Tyco CEO L. Dennis Kozlowski and former Chief Financial Officer Mark Swartz, both convicted in 2005 of grand larceny and sentenced [JURIST reports] to eight to 25 years, still remain.
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 2007, a federal judge gave preliminary approval [JURIST report] to a $3.2 billion settlement agreement [JURIST report] between Tyco, the company's former auditor PricewaterhouseCoopers [corporate website], and investors who were harmed by fraudulent accounting practices orchestrated by Tyco's former top executives. The New Jersey Law Journal has more.
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