http://www.wsws.org/en/articles/2002/07/xero-j01.html
Xerox, a name well known for copy machines, charged by the SEC for deceiving the public between the years of 1997 to 2000. The Securities and Exchange Commission issued a $10 million penalty and restatements from the years 1997 to 2000. During this time Xerox misled and betrayed investors by disguising the company's correct operating performance.
Xerox's manipulative schemes brought the attention and investigation of the SEC. The first method of deceit called the "cookie jar" menthod, stored revenue off of the balance sheet. When funds were short for a current period, the "cookie jar" was dipped into to accomodate the difference so investors would believe Xerox's revenues were meeting the expectations of Wall Street.
The second method, the larger of the two methods, recorded an accerelation in short-term equipmen rentals. Theses revenues were documented as long-term leases meaning the entire value can be recorded as revenue only in the first year of agreement. Short-term rental revenues are documented throughout the agreed contract and revenues expire on the expiration date.
Senior management divised the two schemes that cost Xerox $10 million in penalties. However, since the SEC investigation in 2002, stock prices fell from $60 a share in 1999, the highest the company has been at, to $7 a share.
