Xerox: the next WorldCom?

NEWS Xerox shares took a tumble this morning following reports that the company could be the next to do a WorldCom. The document management company has already said it will have to reissue its financial results for the period 1997 and 2001, having admitted it overstated $3bn worth of profits in that time. But the Wall Street Journal today alleged there is another $3bn which has not been properly recorded. In May, Xerox agreed to pay a $10m fine after the Securities and Exchange Commission(SEC) filed a suit against it over the 'missing' $3bn. Xerox denies any wrongdoing, claiming that the issue is merely to do with the "timing and allocation" of revenue. It has gone on the record to say that there is no "fraudulent revenue... no phony revenue and no fictional transactions". But should the latest reports prove accurate, the $6bn Xerox fraud will dwarf that of WorldCom. The SEC has also filed a suit against the telco, accusing it of financial fraud. SEC chairman Harvey Pitt said he was seeking an order to prevent the company from selling assets, destroying documents and making payouts to senior officers.