WASHINGTON – The U.S. Securities and Exchange Commission said on Wednesday that four former and current partners of Big Four accounting firm KPMG agreed to settle charges stemming from a 1997-2000 earnings manipulation scheme at copier maker Xerox Corp. (XRX).
Three of the individuals agreed to pay civil penalties and to be suspended from practice before the SEC with rights to reapply in one to three years, while a fourth partner agreed to be censured by the SEC, the commission said.
"The settlements announced today, including the largest penalties ever imposed on individual auditors, reflect the seriousness with which the SEC regards the responsibilities of gatekeepers," said SEC Enforcement Director Linda Thomsen.
KPMG itself in April agreed to pay $22 million — the largest payout ever by an accounting firm in an SEC action — to settle charges in the case, in which the SEC alleged that the firm allowed Xerox to manipulate its accounting to close a $3 billion "gap" between actual and reported results.
The SEC said the four individuals agreeing to settle were Ronald Safran, KPMG engagement partner on the Xerox audit for 1998 and 1999; Michael Conway, senior engagement partner on the audit for 2000; Anthony Dolanski, engagement partner for 1997; and Thomas Yoho, review partner from 1997-2000.
Safran and Conway each agreed to pay a civil penalty of $150,000, and Dolanski to pay a penalty of $100,000.