Dell to pay $100 million as fines to the SEC

July 23rd, 2010 - 8:44 pm ICT by Aishwarya Bhatt  

dell San Francisco, July 23 (THAINDIAN NEWS) Dell has been fined over $100 million by the Securities Exchange Commission (SEC) for fraudulent financial practices. The SEC announced this on Thursday.

The company is paying the fine because it used payments from Intel to inflate its profits to meet the Wall Street standards over a period of five years, an act that is described as fraudulent by the SEC. Aside the $100 million fine, the company’s Chief Executive Officer, Michael Dell, has agreed to pay an extra civil penalty of $4 million to the SEC.

The fine is not the maximum that Dell could have suffered for its action. SEC could have punished the PC giant more than that, but the fine against Michael Dell is very rare for it is against a company’s CEO.

According to the SEC, Dell did not disclose payments it received from Intel to its investors. The payments were to ensure that Dell continued to use central processing units from Intel Corp and not Advanced Micro Devices (AMD). But when Intel decided to stop the payments to Dell, the company again failed to give its investors the reason for the drop in the company’s profits.

After investigations, the SEC charged the top executives of Dell for playing a role in the fraudulent practice. The executives charged are Michael Dell, Kevin Rollins who was the former CEO and James Schneider who was the Chief Financial Officer at that time.

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