Make Home Page
Add to Favorites
Xbitlabs on Facebook
XbitLabs is using Twitter
Windows Live Alerts
Dell on Thursday said that as a result of ongoing discussions with the staff of the U.S. Securities and Exchange Commission (SEC), the company recorded a $100 million liability in its first quarter of fiscal 2011 to establish a reserve for the potential settlement by the company of the previously reported SEC investigation that covers relations between Dell and Intel Corp. SEC claims that Dell received illegal payments or discounts from Intel in exchange for maintaining exclusivity.
Michael Dell, chairman and chief executive of Dell, and the SEC staff have recently commenced discussion of a settlement framework relating to Mr. Dell that would resolve allegations relating to the company’s disclosures and alleged omissions prior to fiscal 2008 regarding certain aspects of the company’s commercial relationship with Intel Corp. Any such settlement by Mr. Dell would involve alleged violations of negligence-based fraud provisions of the federal securities laws, as well as other non-fraud based provisions, and would not include any bar against Mr. Dell’s service as an officer and director of a public company. Any settlement would be made without admitting or denying the SEC’s allegations.
The settlement would involve a civil injunctive action against the company for alleged violations of certain federal securities laws, including the antifraud provisions of federal securities laws, relating to certain accounting and financial reporting matters.
“We are hopeful that these settlement discussions will achieve a comprehensive resolution in the near future,” said Sam Nunn, presiding director of the Dell board.
The investigation of the company began in 2005. In response, Dell undertook an independent investigation, completed in 2007, which led to a restatement of certain historical financial reports and implementation of remedial measures.
As a result of the liability recorded, the company’s net income on a GAAP basis for the first quarter of fiscal 2011 has been reduced by $100 million, or 5 cents per share.
Tags: Dell, Intel, SEC, Business
