Pittsburgh, PA: (Jul-16-07) A lawsuit was filed against Tyco International and its former auditor, PricewaterhouseCoopers, by investors who were harmed by fraudulent accounting practices orchestrated by Tyco's former top executives. A shareholders' class action lawsuit was filed against Tyco in 2005, accusing former CEO Dennis Kozlowski, former CFO Mark Schwartz, and former board member Frank Walsh of securities fraud. Kozlowski and Swartz were found guilty of looting the company and defrauding its shareholders out of more than $150 million in unauthorized personal compensation.
In a settlement reached, a federal judge has given preliminary approval to a $3.2 billion settlement agreement. The settlement requires Tyco to establish a $2.975 billion cash fund to pay investor losses and also to give plaintiffs half of any recoveries made in Tyco's lawsuits against Kozlowski and Schwartz. It also includes a $225 million contribution from PricewaterhouseCoopers because the auditor failed to discover the fraudulent accounting that inflated the companies' earnings. [JURIST LAW: TYCO SECURITIES]
