Kozlowski, Swartz banned from public companies

By Palm Beach Business.com

NEW YORK — Former Tyco execs and current prison inmates Dennis Kozlowski and Mark Swartz won’t be pillaging any public companies any more.

Kozlowski and Swartz agreed to a court order that bars  the two former Boca Raton residents from serving as directors or officers of any publicly held company. Ever. The   ban settles allegations of fraud brought against them two by the Securities and Exchange Commission.

Neither Kozlowski or Swartz admitted or denied any wrongdoing in settling the case.

The two are also prohibited from future violations of federal securities laws.

Kozlowski is the former chairman and CEO of Tyco International Ltd. and Swartz, the former CFO. The SEC in 2002 sued the two alleging that they took hundreds of millions of dollars in compensation they were not entitled to, failed to disclose it to shareholders and lied to auditors.

Kozlowski and Swartz granted themselves undisclosed low interest and interest-free loans from the company that they regularly used for personal expenses and other unauthorized purposes. They repeatedly arranged to have many of these loans forgiven by Tyco.

In 2005, a New York State court sentenced Kozlowski and Swartz to prison terms of 8 years and three months to 25 years for their roles in the Tyco fraud. Kozlowski and Swartz also paid about $134 million in restitution to Tyco and criminal fines of $70 million and $35 million, respectively.

Last October, a year New York appeals court upheld the convictions of the two men; last month the U.S. Supreme Court declined to hear their appeals.

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JULY 15, 2009 click to go home
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