Tuesday, September 20, 2005

A good start

That's the punchline to the lawyer joke, "what do you call 1000 lawyers at the bottom of the ocean?"

Well, the news about the CEO of Tyco is a good start too. . .

Ex-Tyco Executives Get 8 to 25 Years in Prison
By ANDREW ROSS SORKIN, Published: September 20, 2005

L. Dennis Kozlowski, the former chief executive of Tyco International who was convicted of looting the company of $150 million, was sentenced yesterday to 8 1/3 to 25 years in a New York State prison, the latest corporate figure to be handed a lengthy prison term in a corruption case. Judge Michael J. Obus of State Supreme Court in Manhattan also ordered Mr. Kozlowski to pay $167 million in restitution and fines.

Handing down the sentence in a packed courtroom, Judge Obus said yesterday: "The crimes at issue here were violations of the defendants' positions of trust and their fiduciary duty on a grand scale. They caused damage to Tyco and to others, including the shareholders who are Tyco's owners and who, like the investing public, generally should be able to rely on the integrity of the management of publicly traded companies."

Mr. Kozlowski, 58, became a symbol of corporate greed for a $6,000 shower curtain, as well as a $2 million birthday party in Sardinia for his wife that was partly paid for by the company. In the two years before his fall in 2001, Mr. Kozlowski made more than $330 million in profits from exercising stock options and selling stock grants, in addition to his salary and bonus of about $5 million a year. But his lawyers have suggested that after the civil litigation, on top of the fines and restitution ordered yesterday, he could be bankrupt.

New York generally requires that criminals with sentences longer than six years go to maximum-security prisons, to be mixed among men convicted of murder and other violent crimes.

I bought Tyco at 47 just before the stock blew up and sold, gratefully, two years later at 27. Thanks, Koz, hope you like your new friends, enjoy the food. . .