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CNN Live At Daybreak

SEC Warning Xerox and KPMG Could Face Civil Charges

Aired April 10, 2002 - 06:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: We want to head to New York City to get a check on business with Deborah Marchini.

Good morning, Deborah.

DEBORAH MARCHINI, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Carol.

Well things are looking a little bit better this morning. I've got the futures pointing to a slightly stronger open after more warnings led stocks to another, though moderate, sell off yesterday. Technology issues especially were under pressure. Microsoft and Cisco Systems both suffered deep losses. The Dow gave back a third of a percent but the Nasdaq lost nearly 2.5 percent. Technology stocks the primary factor there.

Today investors will be focusing closely on Xerox. The Securities and Exchange Commission reportedly is warning two former Xerox executives and its lead auditor, KPMG, they could face civil charges. "The Wall Street Journal" reports the SEC is widening its probe of alleged accounting fraud at the company saying Xerox used complex maneuvers to accelerate how it accounted for revenues from its office equipment that it leased. Last week, Xerox agreed to pay a $10 million penalty and restate earnings all the way back to 1997, but Xerox has not admitted doing anything wrong.

Carol, that's a quick look at business for now, back to you.

COSTELLO: OK, Deborah, thanks. Hey, did you get your taxes done, Deborah?

MARCHINI: No.

COSTELLO: Neither have I. Listen,...

MARCHINI: And I'm dreading this weekend. How about you?

COSTELLO: It's going to be a busy weekend for many of us.

Thank you, Deborah.

Hey, Chad, I know you've had your taxes done for what, months, which means you probably get a rebate.

CHAD MYERS, CNN METEOROLOGIST: A couple.

COSTELLO: You get something back, don't you?

MYERS: You know what, for one year I was single and I'm getting cash back. That marriage penalty was gone for one year.

COSTELLO: Well it's back in your life now.

MYERS: And now I just ruined it again.

COSTELLO: I know.

MYERS: Married again so that's why I got them in so early.

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