This document summarizes the corporate governance failure at Tyco International that occurred in the early 2000s. Key events include:
- Dennis Kozlowski became CEO in 1992 and oversaw rapid growth through acquisitions but also misused company funds for personal expenses.
- An SEC investigation in 2002 found Kozlowski and CFO Mark Swartz had committed tax evasion, improperly used company money, and undisclosed stock sales totaling $430 million.
- Both executives were convicted and sentenced to 8-25 years in prison. A new management team was installed and reforms to Tyco's governance were implemented.
World's biggest financial scam. This presentation would give you all the information about the people who are engaged in the scam and they manipulated their data from balance sheet. How culprits were sent behind bars and what were the changes in Law that were done after this scam. For more understanding of case i will recommend to see the movie
" Enron- The smartest guy in the room"(2005)
World's biggest financial scam. This presentation would give you all the information about the people who are engaged in the scam and they manipulated their data from balance sheet. How culprits were sent behind bars and what were the changes in Law that were done after this scam. For more understanding of case i will recommend to see the movie
" Enron- The smartest guy in the room"(2005)
The WorldCom scandal was a major accounting scandal that came to light in the summer of 2002 at WorldCom, the USA's second-largest long-distance telephone company at the time.
TYCO ACCOUNTING SCANDAL OF 1990s - & its Consequences.pdfmoher22734
• Tyco Inc. was founded in 1960 by Arthur J. Rosenburg
• It is a diverse producing and serving corporation which was initially supported by government research & defense contracts
• It became a publicly owned company in 1964
• It launched its IPO in 1974 and got Listed on NYSE in 1974
• Between 1982 and 2000 it undertook several subdivisions. Tyco has done business in over 1000 locations in 50 countries and hires 69,000 employees around the world.
• Tyco had made numerous acquisitions over the years, including 40 acquisitions since the 1980s and has numerous companies among the Fortune 500
• The firm's revenue increased exponentially from $3.1 billion in 1992 to over $40 billion in 2004, with the firm's market value estimated at over $100 billion
How did the Scam happen
• According to the Tyco Fraud Information Center, an internal investigation concluded that there were accounting errors, but that there was no systematic fraud problem at Tyco.
• Tyco's former CEO Dennis Koslowski, former CFO Mark Swartz, and former General Counsel Mark Belnick were accused of giving themselves interest-free or very low interest loans (sometimes disguised as bonuses) that were never approved by the Tyco board or repaid.
• Some of these "loans" were part of a "Key Employee Loan" program the company offered. They were also accused of selling their company stock without telling investors, which is a requirement under SEC rules
• Koslowski, Swartz, and Belnick stole $600 million dollars from Tyco International through their unapproved bonuses, loans, and extravagant "company" spending.
• Rumors of a $6,000 shower curtain, $2,000 trash can, and a $2 million dollar birthday party for Koslowski's wife in Italy are just a few examples of the misuse of company funds.
• As many as 40 Tyco executives took loans that were later "forgiven" as part of Tyco's loan forgiveness program, although it was said that many did not know they were doing anything wrong.
• Hush money was also paid to those the company feared would "rat out" Kozlowski.
• In 1999 the SEC began an investigation on accounting of acquisitions, including "spring-loading"- underreporting preacquisition earnings of an acquired company. However SEC took no actions.
• In January 2002, a tip drew attention to a $20 million payment made to Tyco director Frank Walsh, Jr which was later explained as a finder's fee for the Tyco acquisition of CIT.
• In June 2002, Kozlowski was investigated for sales tax evasion on $13 million in artwork that he had purchased with company funds. Post that, Kozlowski resigned from Tyco "for personal reasons"
• Kozlowski, Swartz, and Bolnick were charged for failure to disclose information on their multimillion dollar loans to shareholders.
• The SEC asked them to restore the funds in form of undisclosed loans and compensations.
Consequences of the Scam on:
• The Company
The foremost and major challenge faced by the company was the loss that was incurred because of the whole scam.
This presentation was made by Chowdhury Raiyan Tasin for the presentation of their group for their Accounting and Information (AIS) course at Jatiya Kabi Kazi Nazrul Islam University, Mymensingh, Bangladesh.
The WorldCom scandal was a major accounting scandal that came to light in the summer of 2002 at WorldCom, the USA's second-largest long-distance telephone company at the time.
TYCO ACCOUNTING SCANDAL OF 1990s - & its Consequences.pdfmoher22734
• Tyco Inc. was founded in 1960 by Arthur J. Rosenburg
• It is a diverse producing and serving corporation which was initially supported by government research & defense contracts
• It became a publicly owned company in 1964
• It launched its IPO in 1974 and got Listed on NYSE in 1974
• Between 1982 and 2000 it undertook several subdivisions. Tyco has done business in over 1000 locations in 50 countries and hires 69,000 employees around the world.
• Tyco had made numerous acquisitions over the years, including 40 acquisitions since the 1980s and has numerous companies among the Fortune 500
• The firm's revenue increased exponentially from $3.1 billion in 1992 to over $40 billion in 2004, with the firm's market value estimated at over $100 billion
How did the Scam happen
• According to the Tyco Fraud Information Center, an internal investigation concluded that there were accounting errors, but that there was no systematic fraud problem at Tyco.
• Tyco's former CEO Dennis Koslowski, former CFO Mark Swartz, and former General Counsel Mark Belnick were accused of giving themselves interest-free or very low interest loans (sometimes disguised as bonuses) that were never approved by the Tyco board or repaid.
• Some of these "loans" were part of a "Key Employee Loan" program the company offered. They were also accused of selling their company stock without telling investors, which is a requirement under SEC rules
• Koslowski, Swartz, and Belnick stole $600 million dollars from Tyco International through their unapproved bonuses, loans, and extravagant "company" spending.
• Rumors of a $6,000 shower curtain, $2,000 trash can, and a $2 million dollar birthday party for Koslowski's wife in Italy are just a few examples of the misuse of company funds.
• As many as 40 Tyco executives took loans that were later "forgiven" as part of Tyco's loan forgiveness program, although it was said that many did not know they were doing anything wrong.
• Hush money was also paid to those the company feared would "rat out" Kozlowski.
• In 1999 the SEC began an investigation on accounting of acquisitions, including "spring-loading"- underreporting preacquisition earnings of an acquired company. However SEC took no actions.
• In January 2002, a tip drew attention to a $20 million payment made to Tyco director Frank Walsh, Jr which was later explained as a finder's fee for the Tyco acquisition of CIT.
• In June 2002, Kozlowski was investigated for sales tax evasion on $13 million in artwork that he had purchased with company funds. Post that, Kozlowski resigned from Tyco "for personal reasons"
• Kozlowski, Swartz, and Bolnick were charged for failure to disclose information on their multimillion dollar loans to shareholders.
• The SEC asked them to restore the funds in form of undisclosed loans and compensations.
Consequences of the Scam on:
• The Company
The foremost and major challenge faced by the company was the loss that was incurred because of the whole scam.
This presentation was made by Chowdhury Raiyan Tasin for the presentation of their group for their Accounting and Information (AIS) course at Jatiya Kabi Kazi Nazrul Islam University, Mymensingh, Bangladesh.
Ltc pp bus415_wk5 Copyright 2013 Edward F. T. Charfauros. Reference, www.Your...Edward F. T. Charfauros
Edward F. T. Charfauros, inspiring author, assists fellow students with their presentation for a successful grade. He also blogs upon his own inspiring blog, where you'll discover life changing stuff. Sign up for his blog by sending him an email~
Copyright 2013 Edward F. T. Charfauros. Reference, www.YourBlogorResume.net.
Millrock Resources Inc. is a premier project generator to the mining industry. Millrock identifies, packages and operates large-scale projects for joint venture, thereby exposing its shareholders to the benefits of mineral discovery without the usual financial risk taken on by most exploration companies. The company is active in Alaska, British Columbia, the southwest USA and Sonora State, Mexico. Funding for drilling at Millrock’s exploration projects is primarily provided by its joint venture partners. Business partners of Millrock have included some of the leading names in the mining industry: Centerra Gold, First Quantum, Teck, Kinross, Vale, Inmet, Altius, and Riverside. Millrock is a major shareholder of junior explorers PolarX Ltd. and Sojourn Exploration Inc.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
How to get verified on Coinbase Account?_.docxBuy bitget
t's important to note that buying verified Coinbase accounts is not recommended and may violate Coinbase's terms of service. Instead of searching to "buy verified Coinbase accounts," follow the proper steps to verify your own account to ensure compliance and security.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
2. COMPANY HISTORY
• Founded in 1960 by Arthur J.Rosenburg.
• Initially supported by government research contracts.
• In 1964 it became a publicly owned company.
• It was in control of 16 companies by 1968.
• In 1974 its stock was listed on the NYSE.
• Between 1982 and 2000 it undertook several subdivisions.
3. COMPANY OVERVIEW
• It participates in several different industries:
• Electronics
• Fire & Security
• Healthcare
• Plastics & Adhesives
• Engineered Products & Services
• It employs over 267,000 people
• Its services and products are provided worldwide.
• Among market leaders in all industries
Leading
Provider
4. PRIOR TO
JULY 1992
JULY 2001 GROWTH
NET PROFITS $95 MILLION $5.1 BILLION 54 TIMES
RETURN ON
SALES 3.1% 13.8% 4.5 TIMES
SHARE PRICE $4.30 $58.00 13.5 TIMES
COMPANY PERFORMANCE HISTORY
• June 1991
• Hired Mark Swartz, who went on to become the CFO in 1995.
• July 1992
• Hired Dennis Kozlowski as CEO and President of Operations.
5. DENNIS KOZLOWSKI • Graduate of Seton Hall University, New Jersey
• Began work at Tyco in 1976. Kozlowski's job was to fix
up some of the floundering acquisitions of the company
at that time.
• Worked his way up through the company, becoming
CEO in 1992.
• Was key in an $850 million dollar purchase of an under
seas fiber-optic cable business from AT&T.
• Previously worked for Deloitte & Touché.
• Started working at Tyco in 1991.
• In 1995 he became the CFO.
• He was nominated for a CFO Excellence
Award in 2000.
MARK SWARTZ
KEY MANAGEMENT PERSONNEL
6. 1986
Restructure to 4 core
segments
1990s
Named Tyco
International
Early 2000s
> 30
acquisitions, 4
segments trade
independently
1996 – 2001
$ 240 mil - $ 4.8 bil
1992 Fort resign as
CEO
Assisted by CFO,
acquisition escalated,
operating margin
+22.1%
2002, spent $ 8 bil on
>700 acquisitions in last
3 yrs.
SEC investigate on
amending Tyco’s EPS
during 1999-2000
TYCO‟S GROWTH UNDER DENNIS KOZLOWSKI
2002 EPS >40% growth
1992 CEO:
Kozlowski, 46yrs
Acquired Kendall &
doubled earning
Increase salary $
2.1 mil
1997 CEO salary $
8 mil
1999 CEO salary $
170 mil
7. FIRST INVESTIGATION
• SEC launched the first investigation in late 1999.
• Findings
• Overstated expected costs of new acquisitions.
• Made acquisitions appear financially unstable.
• Results
• Technically no laws were broken.
• Tyco agreed to restate earnings.
• No fines assessed or penalties imposed.
8. SECOND INVESTIGATION
• SEC launched the second investigation in
early 2002 against CEO Dennis Kozlowski
and CFO Mark Swartz.
• Tax Evasion.
• Robert Morgenthau aka Sherlock Holmes.
• Improper use of company funds.
• Payoffs were paid to directors to cover up
improper use of funds.
• Undisclosed stock sales. $430 million made
by Kozlowski and Swartz.
• No Whistle Blower.
9. CHARGES
• Inflated operating income by $567 million.
• Improper acquisition accounting by undervaluing acquired assets
and overvaluing acquired liabilities.
• Used reserves to make adjustments and smoothen its publicly
reported results to meet earnings forecasts.
• Failure in disclosure of executive compensation, indebtedness
and related party transactions of its former senior management
in annual reports.
10. • Evading $1 million sales tax
• Failure to disclose forgiven loans of
$19 million
• Misappropriating funds of $170 million
• CEO sold 5.5 million shares receiving
$280 million dollars. CFO sold 2
million shares earning $125 million.
None of the sales disclosed to the
public.
CEO and CFO
11. Received hush
money of $17
million as
bonus from
CEO,
unapproved by
BOD to
conceal
corporate
wrong doings.
CLO-Mark Belnick
12. PUNISHMENTS
• TYCO- $50 million civil penalty
• CEO & CFO
• 8-25 years of prison
• $240 million fine
• CLO-Acquitted of all charges
13. WHERE DID THE MONEY GO ?
• $106 million to employees through Loan forgiveness and relocation program
• $2.1 million for the birthday party of Kozlowski's wife was billed to Tyco.
• Kozlowski used Tyco to avoid around $1 million import taxes after purchasing $14
million in rare artwork
• $2.5 million for a home in Florida, $9 million for additional property, $5 million for
Massachusetts property, $900,000 for Connecticut property and $240,000 jewelry
for Mrs. Kozlowski.
• Kozlowski received $81 million in unauthorized bonuses
• Stephen Foss received $751,101 for supplying aircraft and pilot services to Tyco.
• Lord Michael Ashcroft used $2.5 million in Tyco funds to purchase a home
• Frank E. Walsh, Jr. received $20 million commission
14. • Pre Kozlowski was made CEO:
Stock - $4.30 per share
• Ten years later:
Stock - $58 per share
• Post Kozlowski:
Stock – $16.05 per share
STOCK PRICE 1999-2005
15. • Worst-practices included:
• Poor documentation.
• Inadequate policies and procedures to prevent the
misconduct of senior professionals.
• Inadequate procedures for proper corporate authorizations.
• Inadequate approval procedures and documentation.
• A lack of oversight by senior management at the corporate
level.
• Aggressive accounting & improper auditing by auditors.
Internal Control & Governance Failures
16. • Public Company: Financial Statements – Overstating expenses
• Acquisitions
• Undisclosed sales of stock
• Company funds for personal expenses
• Special “bonuses” to keep quiet!
• Kozlowski, CEO – Tax Evasion
ETHICAL DUTIES NOT COMPLIED
• Company‟s CEO Dennis Kozlowski, and CFO
Mark Swartz
• Inside and outside directors who were involved
• Company saves on taxes
• Company and employees
• Customers
BENEFIT TO SOME HARM TO OTHERS
• Tyco
• Government
• Integrity of the company‟s CEO and CFO
• Company‟s reputation
• Performance
• Stock price
• Employees and their families
• Executives that were not involved
• Stockholders
17. REBUILDING
• Company filed suit against CEO and CFO for
more than $100 million. It fired a total of 9
executives on their board.
CEO- Edward Breen
CFO- David J. FitzPatrick
• New management team recovered some of the
funds taken by CEO and CFO hence restored
investors faith.
• New board of directors voted to make future
executive agreement and board chairman to be
an independent person rather than TYCO CEO.
• Eric Pillmore was hired as VP of Corporate
Governance.
18. NEW CORPORATE GOVERNANCE MODEL
• Installation of corporate ethics programme
and new ethical guide was distributed to all employees.
• 90% of headquarters staff were replaced.
• An Ombudsman position at Tyco who mediated between
employees and management.
• Published confidential hotline „Concern LINE‟.
• In 2004, CEO Edward Breen was listed as one of the
Business week‟s „Best Managers‟.
• In 2008, Tyco was named Corporate Citizen of the year for
helping the homeless.
19. LEARNING/PRECAUTIONS
• Companies should more closely monitor their employees for unethical
conduct
• The government should monitor accounting practices of companies more
closely
• Any executive of companies who exhibit suspicious behavior should be
closely watched
• Is it right to make another company appear more unstable that it really is?
• Is it right to use corporate money for personal use?
• Is it right to bribe board members?
• Is it right to have undisclosed sales of stocks?
MORAL QUESTIONS TO BE CONSIDERED