Tyco admits profit inflation, plans to erase $382 million

San Jose Mercury ^ | December 31, 2002 | Andrew Ross Sorkin and Alex Berenson

[snopercod]

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.

[snopercod]

David Boise? The lawyer that went to Florida to throw the election to AlGore???

That really boosts my confidence in Tyco...

[snopercod]

Boise=Boies

[snopercod]

It's him again...

Boies' Law

[jimtorr]

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.

[snopercod]

I seem to recall that ADT was booking the entire amount of multi-year contracts as income in the year they were signed.

[Sungirl]

Let's hear it for Ceo's!

[steve50]

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

[Snerfling]

For CPAs, corp attorneys and finance types, both Sarbanes-Oxley and PCAOB provide access to corporate/accounting oversight information.

[steve50]

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.

[ZGuy]

TYCO surged at market open today up $1.73 or 11.27% on the news.

[Alamo-Girl]

Thanks for the heads up!

[snopercod]

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...