KPMG, the accounting firm, said yesterday that it had agreed to pay $200 million to settle lawsuits stemming from its audits of Rite Aid and Oxford Health Plans.
KPMG will pay $125 million to settle class-action lawsuits related to its audit of Rite Aid, which stumbled through an accounting scandal in the late 1990's, when it overstated profits by $1.6 billion. The settlement ranks among the largest that KPMG has agreed to pay.
Separately, the firm will pay $75 million to settle lawsuits related to its audit of Oxford Health, whose woes can be traced to a computer system problem in 1997 that left it delinquent in paying doctors and hospitals and put it behind in collecting premiums from customers.
KPMG denied wrongdoing in both cases.
The firm's legal entanglements because of accounting scandals are far from over. Earlier this year, regulators sued the firm over its audit of Xerox. KPMG has vowed to fight the charges and has vigorously defended its work.
“There's a recognition that they can't be fighting too many battles at the same time,” said Mark Cheffers, an accounting consultant who tracks lawsuits against auditors. Accounting firms typically settle fraud lawsuits brought against them, he said, because fighting such legal battles are expensive and juries frequently assign auditors at least some blame.
