What was the Tyco International Scandal?

By Admin. Last updated 6/23/2022 5:59:00 AM. Previous || Next0 comments

What is Tyco Scandal ?

The Tyco International scandal refers to the 2002 theft by former company CEO and Chairman Dennis Kozlowski and former corporate Chief Financial Officer Mark Swartz of as much as $600 million from the firm. The scandal turned into a long, drawn out trial as the two accused men vigorously denied any wrongdoing and fought the charges vehemently. In their march 2004 trial, they argued strenuously that the then-board of directors of Tyco had authorized the principle questionable $150 million they had received as compensation for services rendered. The trial ended in mistrial and a retrial occurred in 2005. At this second trial, they were both declared guilty of more than 30 individual corporate violations.

Tyco Scandal Case in different Legal Systems

The different legal systems in the different states include the civil legal system, common law system of former British Colony and religious legal systems such as Saudi Arabia. While common laws countries such as the United States rely on the judicial precedents, the Civil legal system is used by countries in Eastern Europe and Asia and relies on the organized Written odes.  For the religious law system, the outcomes from the legal jurisdiction are guided by the religious text and beliefs. Thus the Tyco international scandal could have a different investigation, trial process and conviction in Germany and Saudi Arabia.

Investigation Procedure

The investigation entails the process of gathering evidence, information analysis, theory development and validation. In this case, the relevant parties gather facts and witnesses that could be significant in the court process. In the common law, the process of investigation involves gathering and preservation of the evidence, establishing the reason ground for the case to proceed to the pretrial chambers and accurate record and protection of witness and documented evidence.  In this procedure, the two parties focus on conducting an independent investigation that could be presented in the preliminary hearing before the judge (US Department of Justice, nd). In the case of Tyco, there was enough evidence to forward the case to the final hearing where the jury is a significant figure to make decisions on the evidence provided by both the defendants and the plaintiff

Saudi Arabian legal system focuses its legal system on religious facts and beliefs. In this case, the legal system is aligned with the Islamic religious system. Overall, the legal system borrows from the laws and teaching of Prophet Muhamad recorded in the Sharia law teachings of the Quran and Sunnah. In contrast to the common law, the sharia law does not allow the jury to make independent decisions according to their understanding of the recording in the Quran and Sunnah (Akhmetova, Chankova  & Raikhanova, 2016,p.27). In this case, the composition of the legal system includes general courts, select committees, and the specific board of Grievances. Similar to the common law systems, the accused executives in the Tyco international company have a right to seek representation from a lawyer and conduct independent investigation. Furthermore, the evidence in the commercial cases is dependent on the oral statements and documents from the key witnesses and the lawyer may request the court to coerce the other party to produce key documents during the investigation process.

An investigation procedure in the German civil law framework is it different from the two as it borrows from ancient Roman Laws. In this system, a non-technical individual can initiate a court case with sufficient proof of witness statement and documented proof to present the facts and legal proof of the case (Akhmetova, Chankova  & Raikhanova, 2016,p.27). As compared to the American legal system where both parties can facilitate investigation in Tyco Scandal, judges can be investigators in German civil law.

The Trial Process

In the trial process follows the process of investigation where the courts opens proceedings and examines the evidence, questions the respective parties including the witnesses and close the arguments to give room for final verdict from the judge. In the common law system of United States, there is a legal contest between two parties and the judge is the moderator and do not take part investigation. In the common law, the members of the jury are ordinary citizens selected randomly within the jurisdiction (Neal, 2013). Besides, the trial process requires both oral statements and documents from witnesses (Israel,1996). The attorney questions the provided witness while the judge ensures the legality of the presented evidence.

The legal systems in Saudi Arabia and German depict some contrast with the US common law in the trial process. In the Sharia laws, lawyers and the court take part in cross-examination of the provided witness.  While the claimant needs to inform the defendant before the initiation of the court proceedings on the common law, sharia law is unique as it gives the claimant a right to initiate legal proceedings without the knowledge of the defendant (US Department of Justice, nd). As compared to the latter where the judge is a mediator, the judge can frame suitable charges in the German legal system. The German court allows the entire judge to summons witnesses for interrogation on lawyers' request .Moreover, the system offers prosecutors powers to present clear evidence of guilt and hence the defendants do not poof innocence (US Department of Justice, nd).

Conviction process in Tyco Scandal

At the conviction stage, one is the one that the defendant is found guilty by the court of law or considers agreement for plea bargain. The three laws have different aspect convictional procedures and implications of the outcomes. In the American common law, the judge receives assistance from several juries before giving final verdict. In 2002, Manhattan court found Kozlowski and finance Chief Mark Swartz guilty of stealing more than $150 million in secretly forgiven loans and undeserved bonuses. As a result, the two were sentenced to 25 years after being found guilty of 22 counts of conspiracy, fraud and falsifying business records leading to violation of the Security Exchange Act 1934 (Neal, 2013). In the Tyco International case, the common law is independent and mistrust may arise with the mistrust of the jury since the judge rules based on the jury's verdict.

The verdict could have been different in German and Saudi Arabia.  The German legal system considered only the legislated statutes and do not include the decision made in the previous judicial sittings. The legal scholarly writings influence the cases since any legal reasoning refers to the code. The German legal session does not consider a series of sessions aiming at establishing a contest for proof but rather legal and factual issues that form the basis of final judgment. Also, the outcome could be different since the evidence for Tyco Scandal has to be concrete and free from mistrust as an independent judge takes up the case in all stages.  Currently, Kozlowski is under parole and the case could be different in Germany since the court offers a maximum of 15 years in jail without parole. In the Saudi Arabian religious law, there is no room for the award of losses to any party in any form of loss (Norman,2018). Also, the judge is independent of the jury's verdict and there is no room for parole in the final verdict.

In conclusion, there is a basis of the fact that found the two executives of Tyco international company guilty of abuse of financial systems for personal gain. The case could give different outcomes in Germany and Saudi Arabia since the two countries use civil laws and sharia law respectively. While the independence of the judge remains important, the US legal system is fairer in investigation, trials and convictions as compare to the other systems. 

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