Dell inches toward closure in SEC investigation
After proposing settlements, company, ceO await approval
Dell Inc. said Friday that the company and CEO Michael Dell are moving closer to settling a long-term investigation by the Securities and Exchange Commission that involves past accounting irregularities at the company and a failure to disclose rebate payments from Intel Corp., its most important chip supplier.
Dell said it and Michael Dell have made formal settlement proposals to the SEC’s staff, which has agreed to recommend them to the commission for approval. There was no word Friday on the terms of the agreement or when the commission will decide on them.
Dell has previously said any settlement involving Michael Dell would not prevent him from continuing as a director and officer of the company.
In June, Dell disclosed that it had taken a charge of $100 million against first-quarter earnings to cover the company’s potential settlement costs in the case. Those anticipated expenses do not include the settlement that Michael Dell is proposing.
The SEC investigation into accounting practices started in 2005. Dell did its own review and in 2007 restated more than four years of
Continued from B5 financial results for the period beginning in February 2002. The company disclosed that it had overstated sales by a total of $359 million and overstated profits by $92 million.
Dell said last month that the SEC’s investigation had expanded to include the company’s and Michael Dell’s failure to disclose billions of dollars in rebate payments from Intel between 2002 and 2006. The payments were made by Intel in return for Dell’s agreement to use Intel, and not competitor Advanced Micro Devices Inc., as its exclusive provider of computer processor chips, the so-called brains of personal computers.
The company said in June that the investigation of Michael Dell concerns “negli- gence-based fraud charges as well as other non-fraudbased charges” tied to Dell’s failure to disclose the Intel payments.
Dell also on Friday adjourned its annual shareholders meeting until Aug. 12 to give shareholders the chance to review the terms of the settlements.