A proposed settlement between [tag]Tyco[/tag] and the SEC’s enforcement division is pending before a U.S. District Court. Under the settlement, the [tag]SEC[/tag] will determine how to distribute $50 million paid by Tyco.

The [tag]civil complaint[/tag] filed by the SEC alleges that [tag]accounting fraud[/tag] occurred from 1996 through mid-2002 while former CEO Dennis Kozlowski was trying to turn the company into a global manufacturing and services big-shot. Unfortunately, Kozlowski stole from the company and lied about its financial performance. SEC filings by Tyco alleged failed to disclose some [tag]executive compensation[/tag] as well as large loans to executives (which were later forgiven). The company also allegedly inflated its operating income by $500 million by undervaluing assets of its acquisitions. It inflated [tag]operating income[/tag] by an additional $567 million by improperly deducting certain expenses.

Kozlowski and former CFO Mark Swarts were both convicted of [tag]grand larceny[/tag], [tag]conspiracy[/tag], and [tag]securities fraud[/tag] and falsifying business records in connection with their theft of about $600 million from Tyco.