Xerox Corp., Norwalk, Conn., will pay investors $670 million in a settlement of a class-action lawsuit that claimed the company and its executives filed false financial results. Co-defendant KPMG LLP, Xeroxs former outside auditor and a co-defendant, will pay $80 million. The $9 billion Louisiana State Employees Retirement System, Baton Rouge, was a lead plaintiff in the lawsuit, first filed in August 2000. The settlement was given preliminary approval by U.S. District Court Judge Alvin W. Thompson in Hartford, Conn., on March 27.
The case was filed on behalf of investors who bought the stock between Feb. 17, 1998, and June 27, 2002. The suit claimed that Xerox and several of its top officers reported false financial results during the period and failed to adhere to the standard accounting practices the company claimed to follow. Louisiana State Employees claimed a loss of around $7 million.
This was a very long, tough process, said Glen DeValerio of Berman DeValerio, which represents the pension plan and is co-lead counsel in the suit. It was an excellent result in the end. It was not yet known how much of the settlement will go to Louisiana State Employees.
Xerox issued a statement saying it agreed to settle to avoid the time, expense and uncertainty of litigation. Xerox did not admit to any wrongdoing as part of the settlement, which is subject to final court approval and other conditions.