Dell sets aside $100 million to settle fraud charges

By on June 11, 2010, 12:57 PM
Dell is setting aside $100 million from its first-quarter profits for a possible settlement of an ongoing investigation into its accounting practices and its relationship with chipmaker Intel. The allegations relate to how Dell accounted for payments and rebates that it had received from Intel, and directly involve the company's CEO for withholding information.

The whole ordeal with the SEC actually began in 2005 and became formal in 2006. That year Dell said it had launched its own internal investigation into its financial-reporting practices, which eventually led the company to restate its financial results from 2003 to the first quarter of 2007. According to the New York Times, the settlement would cover alleged violations of federal securities laws, including antifraud provision, but would be made without any admission or denial of SEC allegations, nor would it bar Michael Dell from continuing as an officer and director of a public company.

Intel's allegedly anti-competitive partnerships with PC makers have been under scrutiny for quite some time. The chipmaker wrote a huge check to its biggest rival last year in a landmark $1.25 billion settlement that included a five-year cross-licensing agreement and AMD's promise to drop all pending litigation worldwide. Although the latter can't take part in any further investigations against Intel, its allegations had already been picked up by others. As a result, the company is still appealing a $1.45 billion fine from European regulators and facing two antitrust cases filed in the U.S. by the FTC and New York Attorney General Andrew Cuomo.

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