Xerox Hit With Shareholder Lawsuit

Troubled office equipment company Xerox has been named in a lawsuit accusing current and former executives of securities violations, the company revealed in a government filing.

In a report to the U.S. Securities and Exchange Commission filed Tuesday, Xerox said the complaint alleges that in an attempt to inflate its stock price, certain executives made false statements and employed improper accounting practices in addition to other infractions.

The suit, filed in Connecticut, names Xerox Chairman and CEO Paul Allaire, former CEO Richard Thoman, CFO Barry Romeril, former Controller Philip Fishbach and current Controller Greg Tayler, and charges them with violating securities law.

Lawyers for the plaintiffs say they seek damages for those who bought stock between February 1998 and February 2001.

A Xerox spokeswoman says the company vehemently denies any wrongdoing and will vigorously defend itself.

Earlier this month, Stamford, Conn.-based Xerox said investigators it hired concluded that senior management acted responsibly in regard to an accounting debacle at its Mexico unit. The company then said that any fiscal irregularities were limited to its Mexico operation.

The probe uncovered ineffective collection actions and billing inaccuracies, insufficient bad-debt reserves and improper transaction classifications on the sale, lease or rental of equipment. Managers in Mexico, whom the company says engaged in collusion, were fired in June 2000.

Xerox's stock remains under pressure as it deals with lingering questions about its management, even as it attempts to remedy other problems that have bruised its reputation, such as shrinking margins and bad debts from customers.

Shares of Xerox fell 14 cents, or 2 percent, to $6.82 in mild volume in Wednesday afternoon trading.

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