Stull, Stull & Brody Announces Class Action Against Xerox Corporation

Business Wire, Oct 2, 2000

Business Editors & Legal Writers

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

-The following is an announcement by the law firm of Stull, Stull & Brody:

Notice is hereby given that a class action lawsuit was filed on October 2, 2000, in the United States District Court for the District of Connecticut on behalf all persons who purchased the securities of Xerox Corporation, ("Xerox " or the "Company") (NYSE:XRX) between January 25, 2000, and July 27, 2000 (the "Class Period").

The action is against defendants Xerox, KPMG, LLP (the Company's independent auditor), Paul Allaire (Chief Executive Officer, Chairman of the Board), G. Richard Thoman ( was President and Chief Operating Officer until May 11, 2000), Barry Romeril (Chief Financial Officer, Executive Vice President), and Ann Mulcahy (President and Chief Operating Officer since May 1, 2000).

The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 25, 2000, and July 27, 2000. For example, as 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 account 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.

Plaintiff seeks to recover damages on behalf of class members and is represented by, among others, the law firm of Stull, Stull & Brody. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 25 years and has obtained court approval of substantial settlements on numerous occasions.

If you bought the securities of Xerox between January 25, 2000, and July 27, 2000, you may, no later than October 23, 2000, request the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Stull, Stull & Brody, or other counsel of your choice, to serve as your counsel in this action.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017.