March 28, 2008
Xerox Settles Accounting Fraud Charges
Xerox announced a $670 million settlement of a shareholders' suit filed in 2000 charging it with inflating earnings. The company will also place $125 million in reserves for potential liability for three other pending suits. KPMG will pay $80 million to settle charges against it. Neither admitted any wrongdoing.
In 2002 Xerox settled an SEC action involving allegations of accounting fraud during the same period and paid a $10 million penalty, which, at that time, was the largest corporate penalty ever. In 2005 KPMG paid $22.5 million to settle SEC charges involving Xerox. Xerox also restated five years' worth of financial statements. NYTimes, Xerox to Pay $670 Million to Settle Securities Case; WSJ, Xerox, KPMG Settle Shareholder Suit.
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