Dell pays $100m penalty to settle accounting fraud charges
Accounting fraud allegations from the SEC settled by Dell
Dell
has paid $100m (£65m) to settle
SEC
allegations of accounting fraud.
The SEC also charged Dell chairman and CEO Michael Dell, former CEO Kevin
Rollins and former CFO James Schneider for their roles in the disclosure
violations.
It had alleged that Dell had failed to disclose to investors large
exclusivity payments received from Intel to not use central processing units
from Intel’s main rival. These payments helped Dell to meet its targets, rather
than its management and operations.
When the payments were cut, it alleged Dell again misled investors by failing
to disclose the true reason behind the company’s decreased profitability.
On top of Dell’s penalty to settle the charges, Michael Dell and Rollins each
agreed to a $4m penalty and Schneider $3m – without admitting to or denying the
charges.
Former regional vice president of finance Nicholas Dunning, and former assistant
controller Leslie Jackson, agreed to settle charges of improper accounting.
“Accuracy and completeness are the touchstones of public company disclosure
under the federal securities laws,” said Robert Khuzami, Director of the SEC’s
division of enforcement.
“Michael Dell and other senior Dell executives fell short of that standard
repeatedly over many years, and today they are held accountable.”
In their settlement offers, Schneider, Dunning and Jackson consented to being
suspended from appearing or practicing before the SEC as an accountant, with the
right to apply for reinstatement after five years for Schneider and three years
for Dunning and Jackson.
Further reading:
Dell
brings in accounting ethics code
SEC
launches formal investigation into Dell