Former board member Frank Walsh Jr. has become the fourth person indicted in connection with the festering mess at Tyco International(NYSE: TYC). He has been arrested and is expected to plead guilty to fraud charges, according to an announcement from Manhattan District Attorney Robert Morgenthau's office.
Published reports say Walsh is being accused of securities fraud for his role in Tyco's $9.5 billion acquisition of CIT Group last year. The company itself filed a lawsuit against him for "breaching his fiduciary responsibilities by taking a $20 million 'finders fee' in connection with the CIT acquisition, without the knowledge or approval of the Board."
Walsh will reportedly return the $20 million and pay a fine of $2.5 million. The Wall Street Journal says he'll be barred from serving as an officer or director of any public company, settling SEC charges against him.
Walsh now joins a list of ex-Tyco indictees that includes CEO Dennis Kozlowski, CFO Mark Swartz, and Chief Corporate Counsel Mark Belnick. The three are accused of stealing money, falsifying records, and concealing material information.
Tyco's stock price, though up 5% this morning, is down over 70% since news of wrongdoing first surfaced.
