KPMG and Xerox settle with shareholders
Xerox said it will pay shareholders $670m (£336m) without admitting the fraud while KPMG will pay $80m (£40m)
KPMG US and former client Xerox will pay out $750 (£376m) to settle a lawsuit
brought by shareholders over securities fraud that occurred eight years ago.
Xerox investors claimed the company had committed accounting fraud in order
to meet Wall Street expectations.
Xerox said it will pay shareholders $670m without admitting the fraud while
KPMG will pay $80m.
Xerox also paid a $10m settlement fine to the Securities and Exchange
Commission in 2002, after the regulator charged the office equipment company
with defrauding investors through ‘accounting actions’ which disguised true
operating performance., the Wall Street Journal reported.
According to the SEC, Xerox had contravened US GAAP and inflated the
company’s revenue by more than $3bn.
In 2005, KPMG agreed to pay a $22.5m settlement fine to the SEC over charges
relating to the audits it conducted for Xerox between 1997 and 2000. As part of
the arrangement, the firm also agreed to relinquish $9.8m in fees.
Further reading:
Xerox,
KPMG Settle Shareholder Suit
Ex-KPMG partner settles Xerox claims