Thread: Dell to pay $100M to settle SEC fraud charges

Jul 22, 2010

Dell to pay $100M to settle SEC fraud charges

06:04 PM
By Manish Swarup, AP

Dell Inc. will pay $100 million and its founder and chief executive, Michael Dell, will pay an additional $4 million to settle Securities Exchange Commission charges that the computer giant cooked its books to meet earnings targets and falsely show it was cutting operating costs from 2001 to 2006.

Former CEO Kevin Rollins will also pay $4 million, and former CFO James Schneider $3 million.

The SEC said the company engaged in fraudulent accounting and also did not disclose to investors large payments it received from Intel Corp. for not using processors made by the chipmaker's main rival, Advanced Micro Devices.

"Dell manipulated its accounting over an extended period to project financial results that the company wished it had achieved, but could not. Dell was only able to meet Wall Street targets consistently during this period by breaking the rules," Christopher Conte, the SEC's associate director enforcement, said in a news release. "The financial results that public companies communicate to the investing public must reflect reality."

Here's the SEC's complaint.

The Dell resolution comes as the Federal Trade Commission continues to work on an antitrust settlement with Intel. AMD resolved its long battle with Intel late last year, helping the FTC with its antitrust complaint.

Intel still faces an antitrust lawsuit from New York State Attorney General Andrew Cuomo, and is appealing fines levied by European and South Korean regulators.

http://content.usatoday.com/communities ... -charges/1

A $100 million here, a $100 million there, pretty soon you're talking about real money.