Friday, February 29, 2008
The SEC announced that checks totaling nearly $50 million were mailed to investors harmed by the financial fraud at Xerox Corporation between 1997 and 2000. The distribution totals $45,867,740, representing the penalties and disgorgement, plus interest, paid by five Xerox managers and Xerox's auditors. Checks were mailed to 80,964 investors, with an average distribution amount of $566. The SEC, which has been criticized for delays in distributing funds, noted in its press release that the distribution occurred within seven months of the federal district court's approval of the establishment of the Fair Fund in July 2007.
The Xerox Fair Fund resulted from SEC actions brought in 2002 and 2003 against Xerox Corporation, five of its officers, Xerox's independent audit firm (KPMG, LLP) and five KPMG accountants who held senior positions on the Xerox engagement. Among them, the defendants paid more than $46 million to settle SEC charges that they caused Xerox to make materially false and misleading statements in SEC filings. (Ten million dollars of the total amount was paid by Xerox to the U.S. Treasury before the Fair Fund provisions were enacted.)