Specifics of a deal are being hammered out between federal prosecutors and KPMG LLP, and the name of former Securities and Exchange Commission Chairman Richard Breeden is being floated to serve as in independent monitor of the firm's future activities.

An announcement is expected within the next week that will save KPMG from an indictment for its sale of allegedly illegal tax shelters. Investigators have said that the shelters may have cost the government more than $1.4 billion in taxes, and if the Big Four firm were to be found guilty in a court proceeding, it would be barred from doing work for publicly traded companies.

The fine amount now reportedly being bandied about in the talks would amount to around $450 million for KPMG. KPMG has already fired more than a dozen partners, and prosecutors in New York are soon expected to indict many of them partners on charges of fraud and conspiracy. Breeden, the SEC's chairman from 1989 to 1993, has not spoken publicly about the rumor. Since 1996, he has led his own firm, Richard C. Breeden & Co., in work involving turnaround advisory services and strategic consulting to companies experiencing financial or governance distress. In July 2002, he was appointed to act as corporate monitor of WorldCom Inc. by the U.S. District Court in Manhattan, and remains an ex-officio member of WorldCom's board.

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