– Attorney General Anne Milgram today
announced that former Tyco International Ltd.
board member Frank E. Walsh Jr. has agreed
to pay the state $5.6 million to settle a
long-standing civil suit brought by the state
against Tyco that alleged securities fraud
and other causes of action.
The state had charged among other things that
Walsh, an independent director, had taken
an improper payment that was not disclosed
to investors in connection with Tyco’s
acquisition of CIT in 2001. Walsh made no
admission of wrongdoing or liability in settling
the state’s suit.
The suit was filed in 2002 on behalf of the
Division of Investment in the state Treasury
Department against Tyco, the company’s
auditors, and several individuals, including
Walsh. The complaint charged that state pension
funds had suffered significant losses due
to fraud, insider trading at Tyco, the failure
to disclose millions of dollars in personal
loan benefits and accounting improprieties.
International settled with the state for $73.25
million in April 2008.
LLP and its Bermuda affiliate settled for
$5.85 million in March 2009.
are significant recoveries for our state pension
funds,” Attorney General Milgram said.
“This latest settlement demonstrates
our commitment to safeguarding New Jersey’s
financial interests and protecting the state’s
investments from fraud, holding corporations
and individuals accountable.”
settlement represents another reminder of
New Jersey's vigilance to hold companies and
their officers accountable for their conduct
when they are entrusted with our pension fund's
investments,” said Treasurer David Rousseau.
“It is also testament,” Rousseau
said, “to the strong working relationship
on securities matters between the Attorney
General's Office and the Division of Investment."
state’s original lawsuit is still pending
against former Tyco CEO L. Dennis Kozlowski
and former Tyco Chief Financial Officer Mark
and Swartz were convicted in New York in 2005
on criminal charges for giving themselves
unauthorized corporate bonuses, abusing loan
programs and selling Tyco stock at inflated
prices after misleading investors about the
The Walsh settlement was handled for the state
by the law firms of Shalov Stone Bonner &
Rocco and Riker, Danzig, Scherer, Hyland &
Perretti. Assistant Attorney General Carol
G. Jacobson and Deputy Attorney General Samuel
Cornish of the Division of Law acted as liaison
with outside counsel.