Xerox pays out world's biggest ever fraud penalty

Xerox has concluded a $10m settlement with the Security and Exchange Commission, the largest financial fraud penalty ever imposed on a public company.

The settlement, filed in a New York court yesterday, ended a two year long investigation by the SEC, which found that Xerox had overstated its equipment revenues by $3bn and increased pre-tax earnings by about $1.5bn.

Under the terms of the settlement agreed earlier this month, Xerox will pay the fine and restate all financial results dating back to 1997.

The SEC said the severity of the fine reflected Xerox's lack of cooperation in the investigation.

In a statement yesterday the company said it "neither admits nor denies" the claims.

While the settlement completes the SEC probe into Xerox, the agency said it could still bring charges against individual executives as well as Xerox's former auditor KPMG.