Dell banks $100 million to settle fraud charges

By David Goldman, staff writer


NEW YORK (CNNMoney.com) -- Dell has set aside $100 million for a potential fraud settlement, the company said Thursday, as it nears a resolution with the Securities and Exchange Commission of a mysterious case that has plagued the company for more than five years.

The government first launched an investigation into the computer giant in August 2005, alleging violations of securities laws, including fraud related to Dell's financial reporting and to its disclosures about its financial dealings with chipmaker Intel. The investigation also includes allegations against the company's chief executive, Michael Dell.

michael_dell_2008.03.jpg
The SEC charges against Dell extend to CEO Michael Dell.

It is still unclear exactly what Dell did wrong. After an internal review that was completed in 2008, the company acknowledged accounting irregularities, and it adjusted its financial results from between 2003 and the first quarter of 2007.

But neither the SEC nor Dell have stated the exact nature of the charges, and the company declined to comment on the allegations.

The company said that Michael Dell is directly implicated in the SEC's charges. He would be subject to a fine should the case be settled, but would be allowed to continue as CEO and chairman of the board.

Dell's announcement is a sign that a resolution with the SEC is likely, said spokesman Jeff Blackburn. But he said negotiations are ongoing, and the company would not give a timeframe for when the settlement might be paid.

In an official statement, Dell Director Sam Nunn said he is hopeful that the company can soon put the matter behind it.

"The independent directors of the board have affirmed that Michael Dell will continue to lead the company as its chairman and CEO, and he continues to have our complete confidence and support," Nunn said.

Shares of Dell (DELL, Fortune 500) fell more than 2% after hours after rising by more than 2% during normal trading hours Thursday. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,776.91 93.33 0.53%
Nasdaq 4,997.46 5.52 0.11%
S&P 500 2,081.34 12.58 0.61%
Treasuries 2.23 -0.05 -2.06%
Data as of 6:20pm ET
Company Price Change % Change
Bank of America Corp... 16.69 -0.25 -1.48%
Apple Inc 125.69 -0.31 -0.25%
Micron Technology In... 18.20 -0.12 -0.66%
Freeport-McMoRan Inc... 17.25 -0.59 -3.31%
Intel Corp 29.90 -0.14 -0.47%
Data as of 4:04pm ET
Sponsors

Sections

Jared Fogle's weight loss success story is well known. But the success of Subway, the sandwich chain he's promoted for 16 years, is less well known. More

Facebook's Sheryl Sandberg is joining the board at SurveyMonkey, her late husband's online survey and polling company. More

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

The FTC and Florida's attorney general claim a debt relief operation has made millions from consumers by promising to help get them out of credit card debt, but instead stuck them with even more. More