Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, February 29, 2008

SEC Announces Distribution of Xerox Fair Fund

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.)

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To read your comment one would believe that the SEC and the Justice department did a great job here. If your one of the invester's who were lead to believe by the SEC documents and filings details that you were going to recoup a good part of your loss, you are not too happy ...less than 2% of the loss was returned to investors..that doesn't pass muster on a Fair Fund settlement.
Is there some recourse on this?

Posted by: KEVIN POWERS | Mar 4, 2008 11:50:50 AM

What this and many other websites fail to mention is the XEROX SEC "Fair Fund" was deficient by, ooooh, just 2.2 Billion dollars. That's billion with a B. So who f'd up? Either the SEC should have squeezed those pricks for more or they should have come up with a better distribution method. Investors with less than a $10.00 pro rata distribution don't get a dime. I want to see some heads roll at XEROX and the SEC.

Posted by: Investor A | Mar 4, 2008 7:23:16 PM

Xerox "fair fund"? what a joke. nothing fair about a fund that doesnt pay an investers loss do to poor practices.just because the investers pro rata distribution is less than $10.00 should not mean they get away without paying! people took the time to fill out valid claim forms just to be told the were not going to be paid. couldnt they have told us if your under the $10.00 pro rata dont bother filling out the claim form? stupid!!!!

Posted by: Dennis Palmer | Mar 18, 2008 1:36:34 PM

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