Homework: Critical Thinking
FRAUD CASEBOOK
Tyco
Read the following articles or other related articles regarding the Tyco case and then answer the questions below:
Sources:
Taub, Stephen, "Tyco on Tyco: Errors Made, But No Fraud," CFO.com, December 31, 2002.
Hamilton, Walter, "Tyco Details Extravagance of Ex-CEO," Los Angeles Times, September 18, 2002.
Bayot, Jennifer and Andrew Ross Sorkin, "2 Tyco Officials Get up to 25 Years for Fraud," International Herald Tribune, September 19, 2005.
Sorkin, Andre Ross, "Figure Pays $22.5 Million in Guilty Plea," New York Times, December 18, 2002.
Johnson, Linda, "PwC Settles Tyco Investors' Suit Over Fraud," Washington Post, July 7, 2007.
Anonymous, "Ex-Tyco CEO Kozlowski's Fraud Conviction Upheld," The Star-Ledger Business Desk, October 16, 2008.
Task
I. What event sparked the drop in the value of Tyco stock in 2002?
II. Who was the Tyco Chief Executive Officer at the time of the investigation?
III. How many shares of stock did Kozlowski and Swartz sell without proper disclosure?
IV. What corporate governance body was criticized for failing to set appropriate standards of ethics, integrity, accounting, and corporate governance?
V. For how much did Tyco settle their shareholder lawsuits?
VI. In what prison system were the Tyco executives prosecuted?
Discussion Questions
I. What kind of noncash asset misappropriation scheme was perpetrated by Mr. Kozlowski?
II. Why does the venue for the criminal prosecution matter? Given that Mr. Kozlowski was prosecuted in state court, how does he likely benefit and how is he likely to suffer in contrast to being prosecuted in the Federal system?
III. Mr. Kozlowski forgave relocation loans given to 51 employees and paid their corresponding income taxes at a cost to Tyco shareholders of $96 million. How would you hypothesize that this act impacted the fraud, if at all, and why?
Format your homework according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.