Kirby, McInerney & Squire LLP Retained To Commence Class Action Lawsuit Against Xerox Corporation

Business Wire, Oct 2, 2000

Business Editors & Legal Writers

NEW YORK--(BUSINESS WIRE)--Oct. 2, 2000

The following is an announcement from the law firm of Kirby McInerney & Squire, LLP:

The law firm of Kirby McInerney & Squire, LLP has been retained to bring a class action lawsuit on behalf of all purchasers of the securities of Xerox Corporation ("Xerox" or the "Company") (NYSE:XRX) between January 25, 2000 and July 26, 2000, inclusive (the "Class Period"). The action will charge Xerox, KPMG LLP (Xerox's auditors) and certain of Xerox's officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by reason of material misrepresentations and omissions.

As will be alleged in the complaint, on January 25, 2000, Xerox issued a press release announcing that the Company is successfully addressing its domestic operational problems, and reporting excellent growth in its Mexican operations for the fourth quarter of 1999. The statement was materially false and misleading, the complaint alleges, because -- in connection to its operations in Mexico -- the Company improperly recognized uncollectible receivables as income, and failed to properly account for liabilities. These misrepresentations were repeated in the Company's Form 10-K, filed on March 27, 2000, which contained a letter from KPMG, representing that, based upon its audits of the Company, the Form 10-K fairly presented the financial information it contained. The statement was materially false and misleading because KPMG knew, or was reckless in not knowing, of the Company's improper accounting. On July 26, 2000, Xerox announced that its earnings for the second quarter of 2000 would be below analysts' earnings expectations, and that the Company was cooperating with the SEC's investigation of accounting irregularities in Xerox's Mexican operations. In response to the announcement, the price of Xerox shares dropped 16% from $18.19 per share to $15.25 per share.

The lawsuit will seek to recover losses suffered by investors who purchased Xerox securities during the class period, excluding the defendants and their affiliates. Plaintiff has retained as counsel the firm of Kirby, McInerney & Squire, LLP, which specializes in complex litigation, including securities class actions. Kirby, McInerney & Squire has repeatedly demonstrated its expertise in this field and has been recognized by various courts which have appointed the firm to major positions in consolidated and multi-district litigation. The firm's efforts on behalf of investors in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions.

If you are a member of the Class described above, you may move the Court, no later than October 23, 2000, to serve as lead plaintiff. However, you must meet certain legal requirements. If you wish to discuss this action, or have any questions concerning the matters set forth above, please contact:

Pamela E. Kulsrud, Esq.

Shan Anwar

KIRBY McINERNEY & SQUIRE, LLP

830 Third Avenue

10th Floor

New York, New York 10022

Telephone: (212) 317-2300

or Toll Free (888) 529-4787

E-Mail: sanwar@kmslaw.com