A federal judge has approved a settlement by which a former board member of Tyco International Ltd. will pay $5.6 million to settle claims that New Jersey pension funds lost more than $100 million because of securities fraud.
New Jersey charged that Frank Walsh Jr. took a $20 million payment from Tyco, without disclosure to shareholders or other board members, for helping arrange the Princeton corporation's 2001 purchase of The CIT Group.
The state Department of Treasury's Division of Investments filed suit in 2002 against Tyco, its auditors and several individuals, including Walsh, seeking to recover from fraud, insider trading and accounting improprieties at Tyco.
The complaint charged that state pension funds had suffered significant losses due to fraud, insider trading at Tyco, the failure to disclose millions of dollars in personal loan benefits and accounting improprieties.
New Jersey's suit was filed in Newark but was consolidated with other shareholder suits and removed to the U.S. District Court for New Hampshire. Tyco, incorporated in Switzerland, had its operations center in Exeter, N.H., at the time of the alleged improprieties, but moved it to Princeton in 2003.
U.S. District Judge Paul Barbadoro in New Hampshire approved the settlement Tuesday.
In paying the $5.6 million, Walsh made no admission of wrongdoing or liability, says Lee Moore, a spokesman for the Attorney General's Office. Walsh's lawyer, Laurence Greenwald of Stroock, Stroock & Lavan in New York, did not return a call.
The state estimates its losses from the Tyco fraud came to more than $100 million. The latest settlement brings the state's recovery from the Tyco litigation to $84.7 million.
Tyco settled with the state for $73.25 million in April 2008 and PricewaterhouseCoopers settled for $5.85 million in March of this year.
for full article see link: http://www.law.com/jsp/article.jsp?id=1202435483990&ExTyco_Director_to_Pay__Million_in_Suit_Tying_NJ_Pension_Losses_to_Fraud
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