Tyco Agrees To Pay $5 Million In N.H. SettlementOct 23, 2002 | Wall Street Journal New Hampshire state securities regulators said Wednesday they have reached a $5 million settlement with Tyco International Inc. (TYC) over allegations of corporate fraud.
The state alleged that former employees of Tyco including former Chief Executive Dennis Kozlowski, former Chief Financial Officer Mark Swartz, and former corporate counsel Mark Belnick misused corporate funds, made transactions without proper corporate approval and filed false and incomplete regulatory statements with the state.
Also named by the state was former board member Frank Walsh.
"The actions by these named Tyco employees represent the highest form of corporate mistrust and greed," said Mark Connolly, director of securities regulation for the state. "Through their actions, shareholders suffered and investor confidence in public companies was further shaken."
Tyco will pay $5 million to the state, which will be used to finance an investor-education program, Mr. Connolly said. The company also will reimburse the state about $100,000 for the costs of its investigation, he said.
New Hampshire's Bureau of Securities Regulation has been one of numerous government bodies investigating the Bermuda-based conglomerate, which has been reeling from charges that former executives looted the company of huge sums in unauthorized compensation. Messrs. Kozlowski and Swartz have been indicted in New York on charges of stealing $170 million from the company. They have pleaded not guilty.
Tyco also has been under investigation by the Manhattan district attorney, the Securities and Exchange Commission and the U.S. Attorney's office in New Hampshire.