Dell computers pays $100m to settle SEC fraud charge
Published: 23rd Jul 2010 07:31:48
Dell has agreed to pay $100m to settle charges that the computer maker used accounting fraud to make it appear it was meeting analysts' profit forecasts.
Under the settlement with the Securities and Exchange Commission (SEC), Dell's chairman Michael Dell will pay a separate $4m civil penalty.
The SEC alleged that Dell did not disclose large payments received from Intel to not use chips made by a rival.
Dell and its executives have not admitted or denied the charges.
Mr Dell said in a statement: "We are pleased to have resolved this matter."
Under the settlement, former Dell chief executive Kevin Rollins will pay $4m, and former chief financial officer James Schneider $3m.
According to the SEC, Intel's exclusivity payments to Dell grew considerably over the years, peaking at 76% of Dell's operating income in the first quarter of fiscal 2007.
Dell's board reaffirms its unanimous support for Michael Dell's continued leadership”
Without the Intel payments, Dell would have missed analysts' earnings-per-share estimate in every quarter from 2002 to the end of 2006.
Instead of disclosing the Intel payments as the reason for its improving profit margins, Dell cited cost cutting and "declining component costs".
The SEC said: "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," the SEC said.
Intel cut its payments after Dell started using chips from rival AMD. This led to a sharp drop Dell's operating results.
Mr Dell, one of the industry's highest profile figures, said: "We are committed to maintaining clear and accurate reporting of our periodic results, supporting our customers, and executing our growth strategy."
In a statement from Dell, director Sam Nunn said: "The board believes that this settlement is in the best interest of the company, its customers and its shareholders, as it brings a five-year SEC investigation to closure.
"Dell's board reaffirms its unanimous support for Michael Dell's continued leadership, and the management team in its ongoing commitment to transparent accounting, integrity in financial reporting and strong corporate governance."
At 21:02:53 in HeadlinesAn assistant of American painter Jasper Johns has pleaded guilty to selling artworks worth $6.5m (£3.9m) he stole from the artist's studio
At 20:44:59 in EnglandEngineers say the underlying condition of Southampton's Central Bridge is much worse than originally thought, prolonging repair work.
At 20:39:18 in EnglandAn inspection has revealed a Dorset prison still has problems with drugs, legal highs and the treatment of people with mental health difficulties.
At 20:37:12 in WorldThe US is considering making aid drops to Shia Turkmen in northern Iraq who are under siege from Islamic State (IS) militants, US defence sources say.
At 20:27:09 in EnglandA man has been arrested in Birmingham after he was found hiding behind the air spoiler of a lorry that had travelled from Calais, police said.
At 20:17:33 in EnglandHundreds of drivers had their licences revoked in the West Midlands because their eyesight was too poor, according to figures from the DVLA.
At 20:09:02 in HeadlinesBy artificially activating circuits in the brain, scientists have turned negative memories into positive ones.
At 19:56:46 in HeadlinesThe mother of Steven Sotloff, a US journalist being held by Islamic State (IS) militants, has made an emotional video appeal for his release.
At 19:48:34 in EnglandWater voles have returned to every county in England following a reintroduction programme in Cornwall, the Environment Agency has said.
At 19:26:37 in EnglandTwo men have been arrested in connection with suspected child prostitution, following an investigation into an escort agency.
Harvard CitationBBC News, 2010. Dell computers pays $100m to settle SEC fraud charge [Online] (Updated 23rd Jul 2010)
Available at: http://www.ukwirednews.com/news/76536/Dell-computers-pays-100m-to-settle-SEC-fraud-charge [Accessed 27th Aug 2014]
News In Other Categories
The number of people looking for work in France rose 0.8% in July to a new record.
Ten masked men attacked two police officers in their car in County Tyrone on Tuesday night, police have said.
An assistant of American painter Jasper Johns has pleaded guilty to selling artworks worth $6.5m (£3.9m) he stole from the artist's studio
With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
Engineers say the underlying condition of Southampton's Central Bridge is much worse than originally thought, prolonging repair work.
Sting has announced two concerts to help celebrate the 10th anniversary of the Sage Gateshead arts venue.