September 12, 1966
NYSE head steps down
In 1966, Keith Fenston announced that he was stepping down from his post as President of the New York Stock Exchange. Fenston began his tenure in 1951.
September 12, 1996
Another strong day for the Dow
September 12th, 1996 was just another day in the Bull Market. Encouraged by promising inflation reports, the Dow flirted with, and briefly broke, record levels throughout the day. After inching over the record of 5,778 points, blue-chip stocks closed at a still healthy 5,771.94.
September 12, 1997
Credit card losses rise
Americans' fondness for their credit cards often results in the accumulation of considerable debt. A report released on September 12, 1997 announced that the country's annualized losses on bank credit cards had ballooned to its highest level in 14 years. According to the Federal Deposit Insurance Corp. (FDIC), which issued the findings, the losses accounted for 5.22% of every $100 charged to the nation's credit cards. Perhaps more illustrative of the problem than statistics was the attendant news that Americans were declaring bankruptcy in record numbers. According to the FDIC's chairman, Andrew Hove Jr., bankruptcy amounted to roughly half of "bank credit card charge-offs." Karen Shaw Petrou, a senior consultant at ISD/Shaw Inc., interpreted the news in more alarming terms, noting that it painted "a picture of highly leveraged consumers less able to handle their debts--and more willing than ever to walk away from them."
September 12, 2002
Tyco execs indicted
Three former executives from Tyco International, including the CEO and CFO, are indicted in New York on charges that they stole hundreds of millions of dollars from the company. Two of the men, CEO Dennis Kozlowski and CFO Mark Swartz, were later convicted and given lengthy prison sentences. The case became symbolic of the era’s corporate corruption and greed.
Kozlowski and Swartz were charged with using Tyco, a manufacturer of industrial products, as their private bank and looting $150 million while pulling in another $430 million by secretly selling large shares of company stock after its value had been artificially inflated. Among other things, the men took unauthorized loans from the company’s coffers and gave themselves enormous, unauthorized bonuses. In June 2002, three months before the indictments, Kozlowski resigned as Tyco’s chief just before he was charged with evading sales taxes on expensive paintings he’d purchased. At his Tyco trial in 2004, the former CEO’s lavish lifestyle was put on public display and the media had a field day with revelations of his conspicuous consumption. He once spent $6,000 on a shower curtain and $2 million--some of it Tyco money--on an extravagant birthday party for his wife. In April 2004, the case ended in a mistrial after a jury member holding out for an acquittal received a coercive letter from a stranger.
At a second trial in June 2005, the jury deliberated for 11 days before convicting Kozlowski and Swartz on multiple counts of grand larceny, securities fraud, conspiracy and falsifying business records. Each man was later sentenced to 8 1/3 years to 25 years in prison, while Kozlowski, 58, was ordered to pay $170 million in fines and restitution and Swartz, 45, was ordered to pay $72 million.
The summer of 2005 also saw other corporate executives pay a steep price for their white-collar crimes: Former WorldCom CEO Bernard Ebbers was sentenced to 25 years in prison for spearheading an $11 billion fraud that brought down the telecommunications giant, while Adelphia Communications chief John Rigas received a 15-year sentence for stealing hundreds of millions from the cable company. Among the companies that came to represent the corporate scandal and excess of the 1990s--Enron, Adelphia, Tyco and WorldCom--only Tyco survived. It was reorganized under new management and today has 250,000 employees around the world.
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