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Company Background : Tyco International Plc was a company dealing in security solutions and fire protection. Tyco was incorporated in the Republic of Ireland, with operational headquarters in Princeton, New Jersey, United States. Tyco was founded in 1960 by Arthur J. Rosenberg, and became a publicly traded company in 1964. Mr. Dennis Kozlowski joined Tyco in 1975, and become CEO in 1992, at the age of 46. Kozlowski, a ruthless cost cutter, transformed the small England manufacturer into a multinational worth more than $120 billion. Nothing seemed to hold Kozlowski back as a businessman, driving him to unforetold success, and later to his downfall.  What Happened : Tyco's former CEO Dennis Kozlowski, former CFO Mark Swartz, and former General Counsel Mark Belnick gave themselves no-interest and very-low interest loans, sometimes disguised as special bonuses, without approval from the Tyco board, and never repaid these loans. These unapproved bonuses and uncensored extr...

Company Background : HealthSouth is traded as a public company. It operates in the healthcare industry. It was founded in 1979 and has headquarters in Birmingham, Alabama, USA. Its products are: home health, rehabilitation and hospice. It is the largest publicly traded health care company in the U.S. What Happened? HealthSouth got involved in a corporate accounting scandal in which its founder, CEO, and chairman, Richard M. Scrushy was criminated of directing company employees to falsely report grossly exaggerated company earnings in order to meet stockholder expectations. These earnings were allegedly inflated by $1.4 billion to meet shareholder expectations. The accounting fraud began in 1999 and lasted through the second quarter of 2002  (Andrejczak, 2003) . By the third quarter of 2002, HealthSouth’s assets were inflated by $800 million, or 10 percent, the SEC alleges (Andrejczak, 2003) . The company’s in-house accountants made multiple false journal entries to the P...

Company Background : Lehman Brothers Holdings Inc. was a firm specialized in the provision of global financial services. It was founded in Montgomery, Alabama, in the United States of America. The company had headquarters in New York City, New York, in the U.S. It ceased operations in 2008. The founders were: Henry Lehman, Emmanuel Lehman and Mayer Lehman. What Happened? Lehman Brothers hid over $50 billion in loans disguised as sales. They allegedly sold toxic assets [1] to Cayman Island Banks with the understanding that they would eventually be rebought. How they were caught : Their bankruptcy led to the discovery of the fraud. They filed for bankruptcy in 2008, which is the largest bankruptcy ever recorded. Their case was larger than that of Enron, Washington Mutual, WorldCom and GM combined.  On September 15, 2008, Lehman brothers filed for Chapter 11 bankruptcy protection  (Montgomery, n.d.) . Their bankruptcy filing came in as a blow to the financial indu...

Enron Corporation was an American energy company, which also dealt in commodities and services such as electricity, natural gas, pulp and paper, and communications. This company enjoyed untold success until it went bankrupt in 2001. At the close of 2001, Enron’s institutionalized, systematic, and ingeniously planned accounting fraud (known as the Enron scandal) was uncovered. The Enron scandal has since then become one among the most prominent examples of self-willed corporate fraud and corruption. Enron was involved in large scale financial statement fraud. Enron got into debt after several years of domestic and international expansion, involving complicated contracts and deals. It managed to conceal its debt from shareholders by getting into partnerships with other companies, practicing fraudulent accounting, and getting illegal loans. Partnerships Enron had with entities such as RADR and Chewco (funded by Enron executives) permitted the concealment of the debt. On Aug...