Dennis Kozlowski and Tyco: 3,000 Acquisitions, $150 Million and Prison

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Tyco was founded in 1960 by Arthur J. Rosenberg as a research and materials firm. After Dennis Kozlowski became CEO in 1992, it bought roughly 3,000 companies over a decade, including electronics maker AMP and Raychem in 1999 and security company ADT in 1997, a reverse takeover that moved Tyco's incorporation to Bermuda. By the end of fiscal 2000 Tyco reported a $141 billion book value alongside more than $80 billion in long-term debt. Its Tyco Global Network of undersea fiber optic cable ran into the dot-com crash and lost over $3 billion, forcing write-downs in 2002.

Kozlowski resigned in mid-2002 amid an SEC civil fraud investigation, and he and CFO Mark Swartz were accused of taking over $150 million from the company, arguing at trial that the board had authorized the payments. The 2004 trial ended in a mistrial after juror Ruth Jordan allegedly made an OK sign and received threats. In 2005 both men were convicted and sentenced to 8 1/3 to 25 years in New York state prison. New CEO Edward Breen, who took over in July 2002, replaced the board and mandated ethics training, Tyco paid $2.92 billion in 2007 to settle a shareholder class action, and in 2010 a judge applied the faithless servant doctrine to void about $500 million of Kozlowski's 1997 to 2002 compensation. He was paroled in 2014.

One expense from the era was a $15,000 umbrella stand.
Tyco paid a $1.1 million Clean Air Act penalty over trichloroethylene at a New Jersey facility.
Managers at a Connecticut plant were criminally convicted for routing wastewater around filters, sending copper and lead into the sewer.
Tyco ranked 41st on the Toxic 100 list.
In 2007 Tyco was split into three separate independent companies.

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