Tyco International Ltd. (TYC) filed a lawsuit accusing its indicted former executives of reaping more than $40 million in improper “short-swing” trading profits.
The suit, filed late Friday in Manhattan federal court, accuses Tyco’s former chief executive, L. Dennis Kozlowski, and its former financial chief, Mark H. Swartz, of violating a federal law designed to prevent company insiders from buying or selling stock within a six-month period.
Tyco claims the former executives each engaged in more than 30 stock transactions that violated the rule, which is aimed at curbing speculative abuse of inside information.
Kozlowski and Swartz were indicted in September on charges they stole $170 million from Tyco in unauthorized compensation and obtained $430 million from fraudulent stock sales. They have pleaded not guilty.