KPMG and Xerox settle with shareholders

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