U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20471/ February, 29, 2008
SEC v. KPMG, LLP, et al., Civil Action No. 03 CV 0671 (DLC) (S.D.N.Y.)
SEC v. Paul A. Allaire, G. Richard Thoman, Barry D. Romeril, Philip D. Fishback, Daniel S. Marchibroda, and Gregory B. Tayler, Civil Action No. 03 CV 4087 (DLC) (S.D.N.Y.)
SEC Distributes Nearly $50 Million to Defrauded Xerox Investors
The Securities and Exchange Commission announced today that checks totaling nearly $50 million were mailed this past Friday 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. Prior to the enactment of the Fair Fund provision of the Sarbanes-Oxley Act of 2002, the SEC was required to send financial penalties from its enforcement actions to the U.S. Treasury, instead of to the investors harmed by corporate misconduct. As a result of the Act, however, checks were mailed to 80,964 investors, with an average distribution amount of $566.
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.)
Judge Denise Cote, of the United States District Court for the Southern District of New York, approved the methodology used to calculate the amounts paid to Xerox investors injured by the fraud. The distribution occurred within seven months of the Court approving the establishment of the Fair Fund in July 2007.
Questions regarding the Fair Fund distribution should be directed to the court-appointed distribution agent, Gilardi & Co. Contact information for Gilardi is as follows: