Tyco International

Tyco International Ltd is a Swiss security systems company incorporated
in Switzerland, with States operational headquarters in Princeton, New Jersey. Tyco

International is composed of two major business segments: Security Solutions and
Fire Protection.

A conglomerate is a combination of two or more corporations engaged in entirely
different businesses that fall under one corporate group, usually involving a parent
company and many subsidiaries. Often, a conglomerate is a multi-industry
company. Conglomerates are often large and multinational.

Prior to the Tyco scandal, the company was one of America's largest conglomerates
with operating revenues of 38 billion dollars and 240,000 employees worldwide. Tyco
Laboratories began operations in 1960, performing experimental work for the U.S.
government. The firm went public in 1964 and quickly expanded, mostly by
acquisition, to exploit the commercial applications of its work. Dennis Kozlowski
joined the company in 1975 as an assistant controller. The company subsequently
shifted its focus from growth to profits within its three primary divisions: fire
protection, electronics, and packaging. Kozlowski joined Tyco's board in 1987 and
became president and chief operating officer two years later. Kozlowski engineered a
coup to become Tyco's chief executive officer in 1992 and the chair of the board in
1993. He diversified the company, branching into health care. Tyco eventually
became the second largest producer of medical devices in the United States. On
December 5, 2001, the Tyco shares were trading for 59.76 on the NYSE.

The situation began to raise suspicions when the Securities and Exchange
Commission was probing into a restatement of the company's stock price.
Kozlowski's business practices were suspicious. In 1999, the Securities and Exchange
Commission initiated an inquiry into Tyco's practices that resulted in a restatement of
the company's earnings. In January 2002, questionable accounting practices were
revealed. Tyco had forgiven a $19 million, no-interest loan to Kozlowski in 1998 and
had paid the CEO's income taxes on the loan. It was found that he company's stock
price had been overrated, and that the CEO and CFO had sold 100 million dollars
worth of shares, and then stated to the public that he was holding them, which was a
misrepresentation and misled the investors.

The major conspiracy was uncovered by Manhattan District Attorney, Robert
Morgenthau, who was investigating Kozlowski for income tax evasion for some fine art
work that he had purchased. As Morgenthau kept digging into the record keeping of Tyco
and Kozlowski, it was determined that there were other situations that had occurred,
such as a 10 million dollar loan that was totally forgiven by Tyco, and all interest was
billed to the corporation. It became apparent on January 29th, of 2002, that there were
some bad decisions taking place when it was uncovered that Director Frank Walsh
received a 10 million dollar transaction for arranging a purchase of CIT group.

it was discovered that Kozlowski was living an extremely lavish lifestyle. In one
testimony, it was noted that Kozlowski owned an 18 million dollar Manhattan apartment,
with a 6,000 dollar shower curtain. In addition to this information, it was also noted
during trial that his wife's 40th birthday party cost 2.1 million dollars at Tyco's expense.

There was one victim in this case, the company, Tyco. This victim consisted of the
employees, the shareholders and everyone who had a stake in the company at the
company. When this theft occurred, the whole company suffered immensely, the stock
prices fell sharply, and the people involved are the ones that experience problems

Kozlowski and Swartz were found guilty in 2005 of taking bonuses worth more than
$120 million without the approval of Tyco's directors, abusing an employee loan
program, and misrepresenting the company's financial condition to investors to boost
the stock price, while selling $575 million in stock. Both are serving 8 1/3-to-25-year
prison sentences. Belnick paid a $100,000 civil penalty for his role. Since replacing
its Board Members and several executives, Tyco International has remained strong.

During his reign as CEO, Dennis Kozlowski, who was reported as one of
the top 25 corporate managers by BusinessWeek, siphoned hordes of
money from Tyco, in the form of unapproved loans and fraudulent
stock sales

In early 2002, the scandal slowly began to unravel and Tyco's share
price plummeted nearly 80% in a six-week period. The executives
escaped their first hearing due to a mistrial, but were eventually
convicted and sentenced to 25 years in jail.

On June 17, 2005, after a retrial, Kozlowski and Swartz were convicted on all but one
of the more than 30 counts against them.

Then in May 2007, New Hampshire Federal District Court Judge Paul
Barbadoro approved a class action settlement whereby Tyco agreed to pay $2.92
billion (in conjunction with $225 million by Pricewaterhouse Coopers, their auditors)
to a class of defrauded shareholders represented by Grant & Eisenhofer P.A.,
Schiffrin, Barroway, Topaz & Kessler, and Milberg Weiss & Bershad.
Dennis Kozlowski will be released from prison on January 17, 2014, after being
granted parole on December 3, 2013.

In June 2007, Tyco concluded a corporate separation that split the company into three
publicly independent companies: Covidien Ltd(formerly Tyco Healthcare), Tyco
Electronics Ltd. (now TE Connectivity Ltd.) and Tyco International Ltd. (formerly
Tyco Fire & Security and Tyco Engineered Products & Services (TFS/TEPS)).

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Tyco International Ltd is a Swiss security systems company incorporated

in Switzerland, with States operational headquarters in Princeton, New Jersey. Tyco

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