The Securities and Exchange Commission (SEC) today announced a settlement agreement with four KPMG LLP partners responsible for auditing the financial statements of Xerox Corporation when Xerox allegedly was engaged in a fraudulent scheme to manipulate its earnings statements. Three partners will pay the largest civil penalties ever imposed against an individual auditor: two will each pay $150,000, the other will pay $100,000. The three partners also agreed to permanent injunctions and suspensions from practice before the SEC. The fourth partner agreed to be censured. More details are available in Litigation Release No. 19573.
On the trade regulation front, the Federal Trade Commission (FTC), the Better Business Bureau Serving Metropolitan New York, and the Consumer Affairs Committee of the New York City Bar announced a workshop on complying with truth-in-advertising laws. The workshop will be held on Thursday, April 27, 2006.
Finally, the Criminal Division of the US Department of Justice announced a deferred prosecution agreement with the Williams Power Company (WPC) in connection with commodities trading. WPC admitted to knowingly submitting inaccurate reports related to natural gas trades for its own benefit. These reports, provided to industry publications, were used by natural gas traders to price and settle physical and over-the-counter financial derivative natural gas transactions. WPC will pay a $50 million penalty.
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