Parker & Waichman LLP to File Claims Against Xerox Corporation and Former Executives
Tuesday June 10, 11:23 am ET
NEW YORK, June 10 /PRNewswire/ -- Parker & Waichman, LLP announces that it will soon file claims against Xerox Corporation (NYSE: XRX - News) and several former executives on behalf of current and former shareholders of the Company. All current and former shareholders and employees of Xerox are encouraged to visit http://yourlawyer.com/practice/overview.htm?topic=Xerox%20Stock%20Fraud to learn more about the claims to be filed.
The complaints will charge that Xerox executives engaged in a fraudulent scheme that lasted from 1997 to 2000 that misled investors about Xerox's earnings to polish its reputation on Wall Street and to boost the company's stock price. The scheme alleged the use of accounting devices that were not disclosed to investors, many of which violated generally accepted accounting principles (GAAP). The complaint alleges that the defendants' fraudulent conduct was responsible for accelerating the recognition of equipment revenues by approximately $3 billion and increasing pre-tax earnings by approximately $1.4 billion in Xerox's 1997-2000 financial results.
The complaints will also name several individuals who held senior positions at Xerox during 1997 through the publication of Xerox's 2000 financial statements, including: Paul A. Allaire (former CEO, Chairman of Board of Directors and a Director); G. Richard Thoman (former President, Chief Operating Officer and Director); Barry D. Romeril (former CFO, Executive Vice President and Vice Chairman); Philip D. Fishbach (former Comptroller); Daniel S. Marchibroda (former Assistant Comptroller), Gregory B. Tayler (former Director of Accounting Policy, Assistant Treasurer and Controller).
The Securities and Exchange Commission has released the following examples of accounting fraud by Xerox executives:
-- In a September 1997 e-mail copied to Fishbach, Marchibroda and
Tayler, Romeril asked the controller of Xerox Europe about his
progress in assessing a potential accounting device and stated:
"This could be the crucial opportunity for making Quarter 3. I
cannot see a higher priority in terms of once-offs."
-- In November 1998, Romeril informed Allaire, Thoman, Fishbach and
others that over the past four years Xerox's major
earnings-generating market in Brazil had "$700M of unreal profits"
from "non-marketing actions" and that the "[c]onceptual framework
[of] our profile is illusory ... the profits are there, the question
is the timing of when you take them"
-- In August 1998, Fishbach told Thoman that although Xerox Europe's
"operational" growth was 2 percent, "the growth that is likely to be
reported is closer to 10% given headquarters adjustments for margin
normalization and other accounting items"
-- In October 1999, Xerox's vice chairman reported to Romeril and
Thoman that Xerox Europe's underlying operational results, without
accounting devices and restructuring, "have been deteriorating since
1995 and are very different than the reported results," and he
provided them a chart from Xerox Europe's president illustrating
operational results with and without the use of accounting devices
-- Likewise in January 2000, the president of Xerox Europe informed
Thoman, Romeril and others that Europe's pre-tax profits had been
"declining since 1996," that declines in 1999 profits were "driven
by prior year once-offs [including accounting devices], the benefits
of which started to reverse during 1999," but that "this declining
trend has been fully contained in the reported profit" in part
through the use of such accounting devices.
-- In November 1999, Romeril told Thoman and other Xerox executives
that when accounting actions and certain other items were stripped
away from Xerox's overall consolidated reported revenues, Xerox was
essentially a "no growth" company from 1998-1999, and in that same
month Romeril provided Thoman, Fishbach, and others with documents
showing the historical impact of accounting actions and certain
other items in order to show the company's "true operating
economics."
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