Dell allocates $100 million to cope with SEC investigation
By Carl Bagh | June 11, 2010 11:53 PM EST
Dell has allocated $100 million to cope with the repercussions of a probe by the Securities and Exchange Commission (SEC) that has been going on since 2005. The investigation pertains to Dell's financial relations with Intel.
More recently the investigation has looked into the actions of the company's CEO Michael Dell.
The allegations concern mistakes in revenue recognition and accounting irregularities including contravention of anti-fraud provisions of securities laws. The investigation formally started in 2006. As a result, Dell had to delay reporting its earnings in November. The company began its own investigation, which was completed in 2007.
As a result of its audit, the company had to reduce its net income for the restatement period--from 2003 through 2006 and the first quarter of 2007--by between $50 million and $150 million, or 2 cents to 7 cents per share, Forbes reported in 2007.
Dell's relationship with Intel was already under scrutiny in an anti-trust lawsuit. In that case Dell was accused of reporting expenses improperly while it was receiving funds from Intel to use their products instead of the similar cheaper components from AMD.
Dell's shares fell about 2 percent on Thursday following the company's report.
Michael Dell would be subject to a fine if the case is settled, but would be allowed to continue as CEO and chairman of the board.
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