SEC probe to delay Dell results
Computer maker to halt share repurchases, delay quarterly SEC filing, owing to 'possibility of misstatements' in prior reports.
By Grace Wong, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Computer maker Dell will delay filing its quarterly results statement with the Securities and Exchange Commission by the expected date, as the company said Monday an informal SEC probe has raised the "possibility of misstatements in prior period financial reports."

Dell (down $0.46 to $21.19, Charts) said the previously disclosed SEC probe was into accounting and financial reporting matters.

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Shares of Dell slid about 2 percent on the Nasdaq.

The company said that in light of these developments it has suspended its ongoing share repurchase program until further notice. The company also postponed the meeting with analysts that had been set for Wednesday. A new date for the analysts' meeting has yet to be set.

Dell will go ahead with its "technology day" Tuesday, at which it will showcase its latest products and services.

The company said the SEC requests for information have been joined by a similar request from the U.S. Attorney for the Southern District of New York, which has subpoenaed documents related to the company's financial reporting from 2002 to the present.

"We are fully cooperating with the investigations and working to resolve any and all issues raised in connection with those investigations as quickly as possible, and we will take any appropriate remedial or corrective actions to address any problems," said a statement from Chairman Michael Dell.

Dell could not say when it will complete the 10-Q filing for its second quarter, which ended Aug. 4, only that it hoped to do so as soon as possible.

"The company is working with the [board of directors'] audit committee and with the company's independent auditors to determine if any restatements of prior period financial reports will be necessary," said the company's statement.

The announcement comes as a surprise since Dell has long had a reputation of being "squeaky clean" on Wall Street, according to Rob Lutts, chief investment officer at Cabot Money Management, which doesn't own shares of Dell.

"It may be an indication their size has caught up to them. When you get very large and try to integrate in many countries, issues come up," he said.

The investigation is an ongoing matter, but the impact on Dell is likely to be limited, said Kim Caughey, an analyst at Fort Pitt Capital Group, which owns shares of Dell.

"It seems like they are taking this seriously, which is always a good thing, and we don't anticipate this affecting forward results," she said.

The announcement is the latest in a series of problems befalling the nation's leading personal computer makers.

Round Rock, Texas-based Dell has been under fire on Wall Street since it recalled more than 4 million laptop batteries last month. The recall cast the spotlight on the company's more serious long-term challenges, which include slowing growth and and a bland product line.

Hewlett-Packard (Charts) is in the throes of a management crisis related to allegations of possible illegal spying on board members and journalists, while Apple (Charts) is investigating possible irregularities regarding stock options granted to management.


HP: No word on Dunn yet

Dell in the penalty box Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.