• Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 1. Sages and Charlatans: Avoidin... > Red Flag 13: The CEO or Another Top ...

Red Flag 13: The CEO or Another Top Company Official Is Arrested

It is also generally too late for investors to protect themselves against a corporate mugging when they hear that a top executive has been arrested. Usually, the company concerned and its stock have collapsed by the time law enforcement officers have cuffed another one-time high-flier in his New York apartment in the early hours of the morning. For example, members of the Rigas family were arrested on securities fraud charges about a month after their Adelphia Communications cable company filed for bankruptcy protection in the summer of 2002. Tyco’s share price dropped 27 percent the day it was revealed that CEO Dennis Kozlowski had quit because he was about to be indicted on the first charges he faced, which were for alleged tax evasion on art purchases (the more serious charges were filed some weeks later). By that time, though, the company’s stock was already worth less than half its value at the beginning of 2002.


PREVIEW

                                                                          

Not a subscriber?

Start A Free Trial


  
  • Creative Edge
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint