Friday, July 23, 2010
The SEC announced the civil charging and settlement with Dell Inc. premised on allegations that "Dell did not disclose to investors large exclusivity payments the company received from Intel Corporation to not use central processing units (CPUs) manufactured by Intel’s main rival." The SEC Press Release also alleges that "[a]fter Intel cut these payments, Dell again misled investors by not disclosing the true reason behind the company’s decreased profitability." The cost of this can be summed up in the following penalties that were agreed to by the parties:
"Dell Inc. agreed to pay a $100 million penalty to settle the SEC’s charges. Michael Dell and Rollins each agreed to pay a $4 million penalty, and Schneider agreed to pay $3 million, to settle the SEC’s charges against them. Dunning and Jackson also agreed to settle the SEC’s charges."
Checking out the Dell website here, they say in part:
"Dell Inc. today announced that it has reached a settlement with the U.S. Securities and Exchange Commission (SEC) resolving the previously-disclosed SEC investigation into Dell’s disclosures and alleged omissions prior to Fiscal 2008 regarding certain aspects of its commercial relationship with Intel Corporation and into separate accounting and financial reporting matters. The settlement terms are consistent with the settlement framework disclosed by the company on June 10, 2010." (italics added).
Also stated in this release are that:
"Sam Nunn, presiding director of the Dell Board, 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.'"