Auditor Concern Arises at Tyco Trial

Lawyers for the former chief executive of Tyco International, L. Dennis Kozlowski, asked a New York judge to keep prosecutors from asking the company's former outside accountant about his lifetime ban from auditing public companies.

The former accountant, Richard P. Scalzo, was barred from auditing public companies in a settlement with the Securities and Exchange Commission. The judge, Michael Obus of State Supreme Court in Manhattan, said he was inclined to bar prosecutors from asking Mr. Scalzo about the subject at the fraud trial of Mr. Kozlowski and Tyco's former chief financial officer, Mark H. Swartz.

The S.E.C. accused Mr. Scalzo of “recklessly'' issuing fraudulent audits after ignoring evidence that executives were looting Tyco. Mr. Kozlowski and Mr. Swartz have been on trial since September, charged with stealing $170 million by hiding bonuses and secretly arranging for the forgiveness of company loans.

Mr. Scalzo's role as the partner at PricewaterhouseCoopers overseeing Tyco's audits has been a crucial issue. Defense lawyers said that bonuses the two men were accused of stealing from Tyco were disclosed to Mr. Scalzo. A lawyer for Mr. Kozlowski told jurors at the start of the trial that Pricewaterhouse gave the “Good Housekeeping Seal of Approval'' to the payments.

Related Articles

Back to top button