Michael Dell agrees to pay £2.6m to settle SEC charges

Suggested Topics

Michael Dell, the founder of the computer manufacturer that bears his surname, is personally paying $4m (£2.6m) to settle charges that he misled investors by hiding the real source of Dell's profits over several years in the last decade.

The entrepreneur, along with two of his most senior former lieutenants, was charged by the Securities and Exchange Commission, the US stock market regulator, with violating disclosure rules when Dell was relying heavily on secret rebate payments from Intel, the maker of computer chips, to meet Wall Street profit forecasts.

Kevin Rollins, a former chief executive, and James Schneider, a former chief financial officer, will pay $4m and $3m respectively, while the company itself is also paying $100m to settle the fraud charges against it. Dell had disclosed a provision for the settlement in its last financial results.

The SEC says that all of Dell's financial results between 2002 and 2006 were tainted by the deception, first because Mr Dell and his lieutenants failed to disclose the company's reliance on Intel's rebates, and then by failing to explain the real cause of the profit warnings that ensued when the rebates stopped.

"Dell manipulated its accounting over an extended period to project financial results that the company wished it had achieved but could not," said Christopher Conte, associate director of the SEC's enforcement division. "Dell was only able to meet Wall Street targets consistently during this period by breaking the rules. The financial results that public companies communicate to the investing public must reflect reality."

Robert Khuzami, the director of the enforcement division, said: "Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws. Michael Dell and other senior Dell executives fell short of that standard repeatedly over many years, and today they are held accountable."

Independent Comment
blog comments powered by Disqus
Career Services

Day In a Page

Feeding a hungry world – or meddling with laws of nature?

Feeding a hungry world – or meddling with laws of nature?

As scientists at Rothamsted's GM trials plead with activists not to sabotage their work, Michael McCarthy visits the battle field
Monkey meat that could be behind the next HIV

Monkey meat that could be behind the next HIV

Deep in Cameroon's rainforests, poachers are killing primates for food. Evan Williams reports from Yokadouma on a practice that could create a pandemic
Catcalls, whistles, groping: just another day for a young woman

Catcalls, whistles, groping: just another day for a young woman

Government urged to take abuse more seriously as London study shows 41 per cent are harassed
Jailing of Maori separatists stirs colonial-era resentment

Jailing of Maori separatists stirs colonial-era resentment

Militant Tuhoe tribe members defiant amid claims race relations had been set back 100 years
Fatal crashes are cyclists' fault, says Boris

Fatal crashes are cyclists' fault, says Boris

Mayor condemned for saying that two-thirds of riders killed on the road were at fault in accidents
Move over Brangelina, this night belongs to Kingston Bagpuize

Move over Brangelina, this night belongs to Kingston Bagpuize

Unlikely community movie beats the stars to get prized Leicester Square premiere
Solved after 33 years? Case of first missing boy shown on milk carton

Solved after 33 years?

Case of first missing boy shown on milk carton
Like mamma used to make: Pizza Pilgrims is proving a word-of mouth sensation

Pizza Pilgrims: Like mamma used to make

A van dispensing purist pizzas is proving a word-of mouth sensation
The supper on its uppers: Why we need to learn to entertain lavishly for less

Supper on its uppers: Entertain lavishly for less

Dinner parties are buckling under the pressures of food snobbery and belt-tightening...
The 10 best summer cookbooks

The 10 best summer cookbooks

From Claudia Roden's The Food of Spain to The Art of Cooking with Vegetables by Alain Passard...
Gorgeous Georgian: Now we can enjoy the cuisine of Russia's fiery neighbour nearer home

Gorgeous Georgian cuisine

The food of Russia's fiery neighbour is among the world's most inventive and original
Fury at Obama over filmmakers' access to Bin Laden kill team

Fury at Obama over filmmakers' access to Bin Laden kill team

White House denies putting politics before national security
Novak Djokovic: Patriot's game

Novak Djokovic: Patriot's game

The world No 1 is fiercely proud to be from Serbia and to be improving his country's profile. And he knows that winning the French Open – and therefore holding all four Slams – will do his cause no harm at all
Rugby league's great drugs cover-up

Rugby league's great drugs cover-up

After Hull's Martin Gleeson failed a drug test last year it sparked an avalanche of lies, complacency and confusion which Robin Scott-Elliot reveals for the first time
Ian Bell: Forget good-looking shots, I want to be known as a tough operator

Ian Bell: View From the Middle

It was nice to play a pressure innings at Lord's on Monday and be recognised for it