PwC settles Tyco case for $225M

PricewaterhouseCoopers LLP agreed to pay $225 million to settle shareholder claims for not uncovering the $5.8 billion in accounting overstatements by Tyco International LTD.
Today’s settlement will bring the total payments in the accounting fraud case against Tyco of Princeton, N.J., to more than $3.2 billion.
It is one of the largest payments from an outside auditor in securities class action litigation, according to plaintiffs attorneys who brought the case.
Investors who acquired Tyco securities from December 1999 through June 2002 are covered by the settlement.
PricewaterhouseCoopers, which was Tyco’s auditor, was in a position to have uncovered the fraud and to prevent the damages to Tyco’s shareholders, according to the suit.
Former Tyco chief executive Dennis Kozlowski and former chief financial officer Mark Swartz were sentenced to up to 25 years in prison for grand larceny, falsifying business records and conspiracy for their roles in the company’s accounting scandal.
Representing Tyco shareholders in the case in the U.S. District Court for the District of New Hampshire are Grant & Eisenhofer PA of Wilmington, Del.; Schiffrin Barroway Topaz & Kessler LLP of Radnor, Penn., and Milberg Weiss & Bershad LLP of New York.
“This settlement with [PricewaterhouseCoopers] serves as an exclamation point for our litigation over what was one of the most egregious corporate frauds of our time,” said Richard Schiffrin, a partner Schiffrin Barroway.
“While [PricewaterhouseCoopers] was prepared to continue to defend all aspects of its work in the litigation process, the cost of that defense and the size of the securities class action made settlement the sensible choice for the firm,” said PricewaterhouseCoopers spokesman David Nestor.
“In addition, PwC values its ongoing business relationships with all of the Tyco entities and this settlement clears the way for those relationships to continue to grow,” he said.

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