Accounting firm PWC on Tyco hotseat
Published on 2/9/2003
PricewaterhouseCoopers, the world's biggest accounting firm, knew about most
of the transactions at Tyco that have been branded as crimes by Manhattan
Assistant District Attorney John Moscow said in court yesterday that Pricewaterhouse accepted the assessment of Tyco's indicted top execs that the multi million dollar transactions were "not relevant, not material."
As a result, the auditors failed to report the deals to the Securities and Exchange Commission.
Moscow disclosed PWC's role in the scandal at a pretrial conference involving ex-Tyco CEO Dennis Kozlowski and chief financial officer Mark Swartz.
They're accused of looting the company of $600 million through stock fraud and theft by giving themselves excessive perks and loans without board approval.
Manhattan Supreme Court Justice Michael Obus agreed to a defense request to delay the trial to Sept. 29, from a June start.
Defense lawyers said they need to go through mountains of records, including 3.5 million E-mail messages.
Pricewaterhouse denied that allegation said its officers are cooperating with the district attorney's probe "as witnesses." A spokesman added it had no knowledge the loans to the indicted execs were unauthorized.
A law enforcement official said prosecutors have decided not to criminally charge Pricewaterhouse since "they didn't want the surviving four to become the terminal three."
That was a reference to Arthur Anderson, one of the nation's five big accounting firms, which folded after it was convicted of criminal obstruction of justice in the Enron debacle.
Courtesy of New York Daily News