The Enron and WorldCom scandals set the bar for white collar crime pretty high. By comparison, other corporate misdeeds seem like small potatoes. Corporate criminals everywhere are crying out, "What does it take to get a little attention around here?"
Looting Tyco of hundreds of millions of dollars did the trick for former CEO Dennis Kozlowski and ex-CFO Mark Swartz. Or maybe it was the little things: a $2 million toga party for Kozlowski's wife, evasion of $1 million in sales tax, or a $30 million pied-?-terre in the city, whatever that is.
I'm sure investors were captivated by the $100 billion (that's billion, with a b) of Tyco's market cap that was wiped out in a matter of months.
It's hard to top newsmakers like that, but for my money, the Rigas family of Adelphia Communications pulled it off and then some.
Adelphia - which means "brothers" in Greek - used to be one of America's largest cable companies. John Rigas founded the company and served as CEO and chairman. John's number one son Tim was CFO, and Tim's brothers, Michael and James, were VPs. All four were board members, along with John?s son-in-law Peter Venetis. That gave the family five of the board's nine seats.
The Rigases also had 100% ownership of class B super-voting shares, which gave the family majority voting rights. That's how they maintained control of the board even after the company went public.
To say the board and voting configuration was dysfunctional is a gross understatement. That alone should have triggered big red flags for institutional investors. But nobody paid attention to red flags during the tech bubble.… Read more