Oct 8 (Reuters) - Xerox Corp said the U.S.Securities and Exchange Commission is investigating certainaccounting practices at Affiliated Computer Services, which itbought in 2010 for $5.5 billion.
The investigation is focused on whether revenue from someACS equipment resale deals should have been presented on a netrather than gross basis, primarily before the acquisition, Xeroxsaid in a regulatory filing. ()
Xerox moved into business services with its purchase of ACS,the company's biggest deal in its 106-year history. The companynow gets more than half of its revenue from services.
Xerox said the president of its services division hadreceived a "Wells notice" from SEC staff.
A Wells notice is the document the SEC sends to a firm orindividual when it plans to recommend bringing charges.Recipients of Wells notices are given a chance to explain whythe SEC should not file a lawsuit.
Xerox said two other individuals, a current employee and aformer employee, have also received Wells notices.
The SEC staff has advised it will not recommend chargesagainst Xerox, the company said.
- Consumer Discretionary
- Xerox Corp
- Affiliated Computer Services