Companies

PwC settles over Tyco fraud

PricewaterhouseCoopers (PwC), the audit firm, has agreed to pay $225m to settle a class action suit brought by shareholders of Tyco over the massive accounting fraud at the US manufacturing group. Combined with the recent agreement with Tyco, this brings the total settlement to $3.2bn.

The suit alleged PwC, as Tyco’s auditor, was in a unique position to uncover the fraud and prevent the damages to Tyco shareholders. During the period covered by the class action – 13 December 1999 to 7 June 2002 – Tyco is alleged to have overstated its income by $5.8bn.

Dennis Kozlowski, former Tyco chief executive, and Mark Swartz, former chief financial officer, have been convicted of grand larceny, falsification of business records and conspiracy, and are currently serving prison terms of up to 25 years.

August 2007