Monday, April 30, 2007
Settlement In Action Against Former Tyco Officer
The Commission today announced that it had submitted to the U.S. District Court for the Southern District of New York a proposed settled Final Judgment as to Defendant Edward Federman, in the Commission's previously filed civil injunctive action against Federman and two other former executives of Tyco International Ltd. The proposed settlement is based on the allegations in the Commission's complaint concerning Federman's involvement in fraudulent accounting practices at Tyco in violation of the federal securities laws. Without admitting or denying the allegations in the Commission's complaint, Federman consented to the entry of a final judgment that would permanently enjoin him from violating the corporate record-keeping provisions of the federal securities laws and from aiding and abetting violations of the antifraud, periodic reporting, and corporate record-keeping provisions. The proposed final judgment would also order Federman to pay disgorgement in the amount of $1,651,064, plus prejudgment interest thereon in the amount of $799,693.10, and a civil penalty in the amount of $200,000. Finally, pursuant to the proposed final judgment, Federman would be barred from serving as an officer or director of a public company for a period of five years. Edward Federman was, from 1999 until his resignation in January 2001, the Executive Vice President and Chief Financial Officer of Tyco's Electronics division.