Michael Dell did not have to admit
nor deny wrongdoing in the settlement
and stated the company has made efforts to
improve its accounting and disclosures
(do not attempt this at home, as publically traded CEOs
are professionals...they do not go to jail)
By William McQuillen
Oct. 13 (Bloomberg) -- Dell Inc., the world’s third-biggest maker of personal computers, won a judge’s permission to pay $100 million to settle accounting-fraud claims brought by the U.S. Securities and Exchange Commission.
The accord reached in July allows founder Michael Dell to remain chief executive officer after paying a $4 million fine. U.S. District Judge Richard Leon approved the settlement today at a hearing in Washington.
Dell, 45, and the personal-computer maker failed to tell investors about “exclusivity payments” received from Intel Corp. in exchange for shunning products made by rival chipmaker Advanced Micro Devices Inc., the SEC said in a complaint filed in July. The payments allegedly helped Dell reach earnings targets from 2001 to 2006.
Dell, appearing in court, told Leon he had nothing to do with the company’s settlement when asked by the judge how he avoided a possible conflict of interest with his own accord.
“It was appropriate for all that to be handled by independent directors,” Dell said.
The exclusivity payments were at issue in an antitrust lawsuit filed against Intel by AMD, a New York state probe of Intel’s business practices, and a Federal Trade Commission suit brought against Intel in December. Dell, based in Round Rock, Texas, said in June that it had set aside $100 million for the SEC settlement.
Efforts to ImproveWithout admitting or denying wrongdoing in the settlement, the company has made efforts to improve its accounting and disclosures, Michael Dell said.
Dell’s former CEO, Kevin Rollins, and James Schneider, the company’s former chief financial officer, agreed to pay fines of $4 million and $3 million, respectively. Schneider was suspended from appearing or practicing before the SEC as an accountant for five years. The SEC, as urged by the company in its settlement proposal, spared Michael Dell similar punishment.
John Worland, an attorney for the SEC, said the settlement was appropriate and that there isn’t evidence the company intended to defraud.
“The settlement is appropriate” and “represents a strong example of regulatory enforcement,” Worland said.
The case is Securities and Exchange Commission v. Dell Inc., 10cv1245, U.S. District Court for the District of Columbia (Washington).