Confessions of a Tyco shareholder

I have a confession to make: I'm a Tyco shareholder.

I bought when the stock was up, back before the SEC began to look into all those so-called "accounting irregularities," and I bought when it was down. Why? Because I believe in the company. (I also believe in Nortel, though with far less confidence.) It's fundamentals are strong, its chart looks good, it's p/e is fairly low, its analyst recommendations are generally positive, but, above all, I think it's a good company with a bright future. And that, to me, is what is most important. Tyco makes things that people need and will continue to buy: security and fire-protection systems, medical devices, wireless devices and fiber-optic components, plastic products, pharmaceuticals, feminine hygiene products, and so much else. (This is not a recommendation to buy Tyco stock. Do your research and make your own decisions.)

But... there were those irregularities. Not to mention all that theft and fraud committed by Kozlowski et al. Which is why, as a Tyco shareholder, I see this as great news:

L. Dennis Kozlowski, the former chief executive of Tyco International who was convicted of looting the company of $150 million, was sentenced yesterday to 8 1/3 to 25 years in a New York State prison, the latest corporate figure to be handed a lengthy prison term in a corruption case.

Mark H. Swartz, his chief lieutenant, received the same sentence for his role in the thefts and fraud. The two men were convicted in June after a four-month retrial.

Judge Michael J. Obus of State Supreme Court in Manhattan also ordered Mr. Kozlowski to pay $167 million in restitution and fines. Mr. Swartz was ordered to pay $72 million in fines and restitution.

The sentencing follows a parade of other substantial terms imposed on former chief executives convicted of white-collar crimes, most notably Bernard J. Ebbers of WorldCom, who received a prison term of 25 years, and John J. Rigas of the cable operator Adelphia Communications, who was sentenced to 15 years. Those sentences -- in federal courts -- were seen as sending a message to deter huge corporate frauds in the future.

The Tyco sentencing may be the last high-profile corporate misconduct before the most prominent one of them all: the trial next year of Kenneth L. Lay and Jeffrey K. Skilling of Enron.

Handing down the sentence in a packed courtroom, Judge Obus said yesterday: "The crimes at issue here were violations of the defendants' positions of trust and their fiduciary duty on a grand scale. They caused damage to Tyco and to others, including the shareholders who are Tyco's owners and who, like the investing public, generally should be able to rely on the integrity of the management of publicly traded companies."

Exactly. Damage was done and Tyco's integrity was largely destroyed, but perhaps this is the closure we've all been looking for.

Now it's time to get Lay and Skilling.