Dell will pay $100 million to settle fraud claims
WASHINGTON – Dell will pay $100 million to resolve Securities and Exchange Commission accounting fraud allegations in an accord that will let founder Michael Dell stay on as chief executive officer after paying a $4 million fine.
Dell, 45, and the personal-computer maker failed to tell investors about “exclusivity payments” received from Intel in exchange for not using products made by the chipmaker’s main rival, the SEC said Thursday in a complaint filed in federal court. Those payments allowed Dell to reach its earnings targets from 2001 to 2006, the SEC said.
The settlement helps Dell resolve inquiries about the role payments from Intel played in its financial results and those of other PC makers. The payments were at issue in a private antitrust lawsuit filed against Intel by chipmaker Advanced Micro Devices, a New York state probe of Intel’s business practices, and a Federal Trade Commission lawsuit filed against Intel in December.
Dell’s former CEO, Kevin Rollins, 57, and James Schneider, 57, 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.