Friday, October 17, 2008

Court Affirms Kozlowski & Swartz Convictions

The New York Court of Appeals, the highest state court in New York, affirmed the convictions of L. Dennis Kozlowski and Mark H. Swartz. The former  CEO and CFO of Tyco received sentences of 8-25 years, despite being first offenders. (see here, here) The decision, included the question of "whether the admission of an attorney's testimony concerning certain facts related to a corporate internal investigation improperly conveyed to the jury an opinion regarding defendants' guilt." The Court found that the testimony and prosecutor comments "did not convey such an opinion." The Court also held that there was no abuse of discretion "in quashing defendants' subpoena duces tecum, which sought the factual portions of certain interview notes and a memorandum prepared during the course of the internal investigation." 

The decision does reference the Stein case in saying:

"While collaboration between prosecutors and attorney investigators may provide a public benefit through the more efficient detection and punishment of corporate wrongdoing, it may come at the expense of the proper safeguarding of the rights of individual corporate employees (see Stein, 2008 US App LEXIS at *66-69). Courts must be sensitive to these competing considerations and endeavor to strike an appropriate balance between the rights and interests of law enforcement, corporations and their employees, and the accused. We cannot say that the balance struck by the trial court here amounts to an abuse of discretion as a matter of law."

See also Joel Stashenko, NYLJ,, Former Tyco Executives' Convictions, Fines Upheld by N.Y. High Court


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