Dell To Pay $100 Million To The SEC

July 23rd, 2010 - 7:39 pm ICT by GD  

By Ranjan Bhaduri
web-dell_664903a_780421gm-aJuly 23, (THAINDIAN NEWS) Dell Inc which is one of the largest PC makers of the world has agreed to pay a hefty fine in excess of $100 million to clear disclosure accounting fraud charges slapped by the SEC (Securities and Exchange Commission). The SEC had alleged that Dell had misled its investors by using money it got from leading chip maker Intel to present its quarterly earnings statements. The compensation will be paid by the company, a number of top executives and Michael Dell, the founder.

Intel had an agreement with Dell to make sure that Dell use chips made by it and not the ones made by its arch rival AMD. Dell got rebates from Intel for not using AMD CPUs and chips in its desktop PCS and servers. Later Dell did use chips from AMD and then Intel cut down the rebates. It resulted in the financial performance of Dell taking a nosedive. Dell reportedly did not make it clear to the investors about the source of the rebate. SEC also accused that Dell had manipulated its accounts to project a report of financial gain which was far from true.

Dell according to the SEC had met the Wall Street rules only by presenting an inflated and manipulated figure.

Dell is paying the settlement but it has not accepted the allegations filed by the SEC. The former CEO of Dell Kevin Rollins and the founder Michael Dell will pay $4 million each. A few other Dell officials will also have to churn out fines as it has been reported. The secret was revealed after Dell started using AMD chips post 2006.

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