A federal judge has approved the $153.9 million settlement of KPMG and law firm Sidley, Austin, Brown & Wood with wealthy tax-shelter investors, according to published accounts.
U.S. District Judge Dennis M. Cavanaugh reportedly called the agreement, initially reached in October, “fair, reasonable, and adequate.”
Under the settlement, about 200 clients will receive an average payout of $825,000, which covers transaction costs for the tax shelters but not back taxes and penalties, according to the Associated Press. Another 50 clients opted out of the settlement and will pursue their own claims, the AP added.
The law firm that brokered the settlement, Milberg Weiss Bershad & Schulman, will reportedly receive $24.6 million.
Last August, KPMG entered into a deferred-prosecution agreement that enabled it to avoid an indictment over the sale of questionable shelters. The firm agreed to admit wrongdoing, pay $456 million, and accept former Securities and Exchange Commission chairman Richard Breeden as an outside monitor. The agreement remains in force through the end of the year, at which time charges will be dropped if the firm has abided by its end of the deal.