Dennis Kozlowski, former chief executive of Tyco International, and Mark Swartz, former chief financial officer, were accused of stealing more than $170m from the company and obtaining more than $430m through fraudulent stock sales.Mr Kozlowski is the most prominent US executive to be charged in relation to the recent string of corporate scandals.
Mark Belnick, former chief corporate counsel, was charged with falsifying business records to conceal $14m of illicit company loans.Both Mr Kozlowski and Mr Swartz - who had been one of the most aggressive and respected deal-making teams in corporate America - could face up to 30 years in jail and fines, if found guilty.
A new management team at Tyco is trying to pull the group - whose interests range from electronic security to medical products out from the shadow of scandal and improve corporate governance.
On Thursday, the group’s board voted to nominate five new directors, clearing the way for all nine Koslowski-era board members to resign by next year’s annual shareholder meeting.The company itself filed a lawsuit on Thursday against Mr Kozlowski alleging that he concealed “larcenous acts” from the board.
The suit seeks repayment for unauthorised funds and loans, forfeiture of all Mr Kozlowski's income and benefits back to 1997 and punitive damages. The SEC also wants to force the three men to return their compensation since the alleged fraud began.