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Tyco admits profit inflation, plans to erase $382 million
San Jose Mercury ^
| December 31, 2002
| Andrew Ross Sorkin and Alex Berenson
Posted on 12/31/2002 4:13:06 AM PST by snopercod
Edited on 04/13/2004 3:30:06 AM PDT by Jim Robinson.
[history]
Tyco International engaged for years in financial gimmickry to inflate its earnings, the company acknowledged for the first time Monday, saying it would erase $382 million in profits it had previously claimed.
Tyco said a five-month internal investigation had uncovered a corporate culture that openly encouraged managers to push the rules of accounting to mislead investors about the company's results. A memorandum to employees at one division directed them to find cost savings by ``financial engineering.'' At another unit, employees were told to ``create stories'' to justify an accounting change that would improve Tyco's earnings.
(Excerpt) Read more at bayarea.com ...
TOPICS: Business/Economy; Crime/Corruption; News/Current Events
KEYWORDS: bigcogwheelturns; davidboise
David Boise? The lawyer that went to Florida to throw the election to AlGore???
That really boosts my confidence in Tyco...
1
posted on
12/31/2002 4:13:07 AM PST
by
snopercod
To: snopercod
Boise=Boies
2
posted on
12/31/2002 4:14:16 AM PST
by
snopercod
To: Mia T; Alamo-Girl
3
posted on
12/31/2002 4:18:55 AM PST
by
snopercod
To: snopercod
Oh, great. I have extensive dealings with "ADT, a Tyco Company" for my company.
Well, we've been hinting to ADT for a while now that if they don't clean up their act we'll start doing our own alarm installations, maintenance and monitoring, once again.
4
posted on
12/31/2002 4:23:25 AM PST
by
jimtorr
To: jimtorr
I seem to recall that ADT was booking the entire amount of multi-year contracts as income in the year they were signed.
5
posted on
12/31/2002 4:30:48 AM PST
by
snopercod
To: snopercod
Let's hear it for Ceo's!
6
posted on
12/31/2002 4:50:55 AM PST
by
Sungirl
Comment #7 Removed by Moderator
To: Sungirl
You gotta love the terminology, fraud is now "pushing the accounting rules". Not one investment banker/accountant up on charges yet for conspiracy to defraud, even after the "Hypothetical Future Value" tape came out. Looks like crime pays rather well
8
posted on
12/31/2002 5:23:10 AM PST
by
steve50
To: steve50
For CPAs, corp attorneys and finance types, both
Sarbanes-Oxley and
PCAOB provide access to corporate/accounting oversight information.
9
posted on
12/31/2002 5:28:14 AM PST
by
Snerfling
To: Snerfling
Neither bill is required for a conspiracy to defraud case, which is obviously the crime here. Oh well, can't put future large campaign donors in jail, it sets a bad precedent. And you never know what they might say on the stand to save their backsides.
10
posted on
12/31/2002 5:46:52 AM PST
by
steve50
To: snopercod
TYCO surged at market open today up $1.73 or 11.27% on the news.
11
posted on
12/31/2002 7:28:37 AM PST
by
ZGuy
To: snopercod
Thanks for the heads up!
To: ZGuy
TYCO surged at market open..That's a good thing, since I actually own some in my IRA. I had tried to sell it at 51, but it gapped down and blew right by my stop-loss order. Sheesh...
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