Tyco International has assigned claims against its former auditors PwC to investors, after agreeing to pay $3bn (£1.5bn) to settle its own case out of court.
Following the settlement of the class-action case, Tyco brokered a deal with investors giving them its right to sue the auditors. In return, the shareholders will effectively give Tyco their claims against former CEO and CFO Dennis Kozlowski and Mark Swartz, receiving half of whatever the company recoups from the pair.
Actions from shareholders are already pending against PwC, and the new claims are set to be pursued alongside.
The telecoms and security giant was embroiled in a securities fraud lawsuit after the two executives were implicated in a profit manipulation scandal.
Kozlowski and Swartz were accused of inflating revenues by $5.8bn, raking in $150m for themselves during the late 1990s and early 2000s.The scandal wiped $100bn from the company's market value.
Lawyers for the shareholders said the Tyco settlement with shareholders would top $3 billion with interest, making it the largest payout ever by a single corporate defendant in a securities fraud lawsuit
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