KPMG LLP yesterday agreed to make settlement payments totalling $22.5 million to the SEC concerning the scandal with Xerox Corp. to do away with the claims that it helped its clients with violations of securities laws. The deal now has to be approved by U.S. District Judge Denise L. Cote in Manhattan.

The SEC blames the failure to discover any fraud that permitted the photocopier giant to boost revenue by $1.5 billion from 1997 to 2000.

"The investing public deserves to know that auditors will be held accountable when they fail to perform their duties with the degree of professional care required of the auditing profession," SEC associate enforcement director Paul R. Berger said.

Xerox was accused of premature booking of revenue it obtained from long-term equipment leases and improper use of excess "cookie jar" reserves to fudge its numbers. Regulators claim the KPMG was familiar with the tricks used by Xerox and never responded to the warnings of other auditors about the irregularities.

KPMG said in a statement that the settlement "is reflective of the firm’s efforts to work with our regulators in a cooperative way in order to help strengthen public confidence in the capital markets."