Tyco hands over PwC claim as it settles for $3bn

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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