Michigan Sues Tyco for Pension Fund Losses
A report in Crain's Detroit Business notes that the State of Michigan is suing Tyco International, four of its executives, and its auditors for $50 million in losses in Michigan state pension funds. Tyco manufactures a wide variety of products such as electric components and health care products.
Tyco was one of the famous corporate implosions that led to the Sarbanes-Oxley corporate governance law. The "implosion" was was caused by a multibillion dollar accounting fraud, and resulted in some of Tyco's top executives going to prision. As a result of public disclosure of the fraud, Tyco stock plummeted, resulting in massive losses to its stockholders, including the State of Michigan. Overall, Michigan pension funds hold approximately $62 billion in investment assets.
The lawsuit was filed in the United States Federal District Court in Detroit, and will be prosecuted on behalf of the state by Michigan Attorney General Mike Cox.
