Tyco International

A Bermuda-registered conglomerate (security systems, valves, electronics, healthcare) built by acquisition into a $100B+ company under Dennis Kozlowski.

A company whose CEO and CFO took about $150M in unapproved pay and forgiven loans and sold shares at inflated prices, while the accounts overstated income by at least $1B (SEC).

Tyco began as a research laboratory in 1960 and, after Dennis Kozlowski became CEO in 1992, bought hundreds of companies to become a conglomerate worth over $100 billion. Manhattan prosecutors said Kozlowski and CFO Mark Swartz took about $150 million in bonuses and forgiven loans the board never approved — the $6,000 shower curtain and $2 million Sardinia party became the emblems — and the SEC found the accounts inflated income by at least $1 billion. Kozlowski resigned in June 2002 and was convicted at a retrial in June 2005. Tyco paid the SEC $50 million in 2006 and shareholders $2.975 billion in 2007, split itself in three that year and was absorbed by Johnson Controls in 2016.

SEC settled charges against Tyco (April 2006): $1 disgorgement and a $50M civil penalty for accounting fraud. Securities class action settled for $2.975B (May 2007), then the largest recovery from a single corporate defendant, plus $225M from auditor PwC. Kozlowski and CFO Mark Swartz were convicted in June 2005 and ordered to pay $134M restitution and fines.