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.