Compare and Contrast Tyco Investigation (USA Saudi Arabia & Germany) Research Paper 2022

Running head: AYN454
COMPARE AND CONTRAST TYCO INVESTIGATION (USA, SAUDI ARABIA &
GERMANY)
Name of the Student
Name of the University
Authors note

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Introduction
The suspected or real unethical actions of individuals operating inside or on behalf of a
company constitutes a corporate scandal. There have been several recent crashes and scandals
that have involved some kind of false or improper maintenance of accounts (Chen, 2016). In
most of the cases, this unethical practice of several organizations revealed either by the
whistleblowers or at the time of inspection. The method of adjudication of criminal law is the
judicial procedure. While criminal proceedings differ significantly from jurisdiction to
jurisdiction, the process usually starts with a criminal charge that either under bail or
incarceration leads to the conviction or acquittal of the offender. This paper mainly focuses on
the discussion of comparing the trial process and conviction between the US, Germany and
Saudi Arabia concerning Typo corporate scandal.
Discussion
The 2002 corporate crisis in Tyco focuses on the issue of unethical trade activity and
related problems. The case of Tyco reveals that a number of its highest-ranking managers,
particularly CEO Kozlowski, was also involved in unethical trade practice. Kozlowski engaged
in several financial activities which were not included in the financial statement of the company.
Kozlowski also participated in unethical transactions with other Tyco officers and lower-ranking
personnel to his unlawful monetary transactions. The court case showed that Kozlowski stole
Tyco’s millions of dollars and extensive illicit financial transactions had been performed by him.
Theft of over US$150 million made Kozlowski and former Chief Financier Mark H Swartz
guilty. Both of them had been punished with imprisonment for a term of not less than 8 years and

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4 months and not more than 25 years ("2 Top Tyco Executives Charged With $600 Million
Fraud Scheme", 2020).
The US is known as a common law country. The common law of England has been
adopted by all of the states of the US except Louisiana because it is based on the French Civil
Code. However, where a statute is available, common law is not used. Basically, in the US
common law is used to fill the holes. Under this system, Case law consists of the compilation of
previous legal rulings by courts and similar courts, which were reviewed by these judgments to
resolve ambiguities of current cases. Such rulings in the past are referred to as ‘case law’. This is
the concept by which the judges were bound by such a past judgment which is also called as
‘Stare decisis’ which means ‘let the judgment stand’. Such explanations of the judiciary are
distinct from statutory law, which are codes passed by legislative bodies, and the regulatory law
defined by statutory executive bodies (Del-Bove & Francoz-Terminal, 2015). In civil cases,
usually, the complaint has been made by the plaintiff against the defendant which describes the
damage faced by the plaintiff, the role of the defendant in causing such damage and plaintiff may
also ask for compensation from the defendant. Based on the plaintiff’s complaint the case
prepares. In the trial process, after hearing all the parties and by applying the rule of evidence the
judge determines a case. Federal law describes fraud as any intentional falsification or deception
that benefits either a person or an organization. The federal government penalizes different forms
of fraud expressly identified under federal law by the lawyers at the Attorney’s office of the
United States. Such laws recognize various forms of fraud, each requiring different penalties
(Grossi, 2015). By following the same way the Tyco corporate scandal case had been determined
in 2004 under the common law system of the US.

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However, Germany’s judiciary is the court system which interprets and applies German
law. In contrast with common law, the German law is a civil law primarily based on an overall
compendium of rules. Germany uses an inquisitorial method in criminal and administrative law
in which the judges participate actively in the examination of the facts as contrasted with an
adversarial system in which the position of the judge is mainly that of an unbiased arbitrator
between the plaintiff or complainant and the defendant. Across Germany, judicial independence
has traditionally been older than democracy (Alexy & Dreier, 2016). Historically powerful court
organization is subject to judicial review and almost all federal and state acts. The legal system
of Germany is different from the US. The judicial procedure is an ‘inquisitorial’ mechanism
where judges have an active part. The accused is assumed to be innocent unless proved guilty
under German law. In Germany, based upon the complaint made by the plaintiff the case starts
against a defendant. Judges play an active role in the investigation of the case. After the
completion of the hearing and by applying the rule of evidence a case will be determined by the
judge. Both the guilt and innocence of the defendant and the punishment if found guilty are
decided by the judge based on a single, thorough judge and this system is different from the US
(Brouard & Hönnige, 2017). The Court undoubtedly decides sentences, and conditionally
extends jail terms.
Whereas, the legal system of Saudi Arabia is completely different from the US and
Germany because it is based on religion. Saudi Arabia’s legal framework is based on Sharia,
Islamic law from the Quran and the Islamic prophet Muhammad’ traditions. Sharia sources also
provide Islamic scholarly consensus that was established after the death of Muhammad. The
medieval texts of the literalist Hanbali school of Islamic Law influence the judges in Saudi
Arabia (Buchan, 2015). Sharia was introduced in unmodified form only in the Muslim world in

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Saudi Arabia. Because of the absence of a judicial precedent, the nature and substance of the
laws of that nation have become greatly unclear. The Government thus announced its intent to
codify Sharia law in 2010, and substantial progress was made by releasing a sourcebook of laws
and precedents on 3rd January 2018. Sharia legislation was also augmented by royal decrees
addressing modern subjects such as intellectual property and corporate law. If a plaintiff failed to
convince the defendant for settling a dispute then an application in compliance with Article 34
must need to be made by the plaintiff to the appropriate execution court (Baamir, 2016). After
hearing all the parties and applying proper Sharia law the judgment will be given.
Conclusion
Therefore, from the above discussion, it can be said that different judicial system has been
followed by various countries. Among these systems, the Common law system is adopted b most
of the countries. Religious law system mainly followed by Muslim countries. Every legal system
is indeed different from each other but the main objective of all of these systems are the same
that is a fair, just and reasonable decision.

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Reference
2 Top Tyco Executives Charged With $600 Million Fraud Scheme. (2020). Retrieved 16 April
2020, from https://www.nytimes.com/2002/09/13/business/2-top-tyco-executives-
charged-with-600-million-fraud-scheme.html
Alexy, R., & Dreier, R. (2016). Precedent in the Federal Republic of Germany. In Interpreting
Precedents (pp. 17-64). Routledge.
Baamir, A. Y. (2016). Shari’a Law in Commercial and Banking Arbitration: Law and Practice in
Saudi Arabia. Routledge.
Brouard, S., & Hönnige, C. (2017). Constitutional courts as veto players: Lessons from the
United States, France and Germany. European Journal of Political Research, 56(3), 529-
552.
Buchan, J. (2015). Secular and religious opposition in Saudi Arabia. In State, Society and
Economy in Saudi Arabia (RLE Saudi Arabia) (pp. 108-126). Routledge.
Chen, L. (2016). Local institutions, audit quality, and corporate scandals of US-listed foreign
firms. Journal of Business Ethics, 133(2), 351-373.
Del-Bove, M. C., & Francoz-Terminal, L. (2015). How common is the common law? Some
differences and similarities in British and American Superior Court Decisions.
Grossi, S. (2015). The US Supreme Court and the Modern Common Law Approach. Cambridge
University Press.