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Dell Inc. said Chief Executive Officer Michael Dell is in talks with the U.S. Securities and Exchange Commission to settle allegations related to the company’s relationship with Intel Corp.
The settlement would “involve alleged violations of negligence-based fraud provisions of the federal securities laws, as well as other non-fraud based provisions,” Dell said in a statement today. The company has also set $100 million aside to settle an existing agency investigation.Discussions relate to the relationship between Dell Latitude X200 Battery, the third-largest computer maker, and Intel, the world’s biggest manufacturer of semiconductors, Dell said without elaborating. The investigation probably concerns the way Dell accounted for chip discounts from Intel over a five-year period through early 2007, said Ashok Kumar, a Rodman & Renshaw Inc. analyst in San Francisco.“There are some gray areas, but I don’t think it’s any egregious or anti-competitive behavior,” said Kumar who rates Dell 8U443 Battery “market perform” and doesn’t own shares. “It’s just aggressive pricing and shouldn’t be taken in any other light.”
Any settlement wouldn’t result in Michael Dell being barred from serving as a director and officer of a public company, according to the filing by the Round Rock, Texas-based company. Talks between SEC staff and the CEO got under way recently.
Report Delayed
SEC spokesman John Nester declined to comment.Dell spokesman David Frink said the company wouldn’t comment further on current investigations. Intel declined to comment, said spokesman Tom Beermann.
Intel’s payments to PC makers have come under scrutiny by regulators who allege the chipmaker used them to dissuade customers from purchasing products from rival Advanced Micro Devices Inc.
Starting in 2005, the SEC began an investigation of Dell’s financial reporting that resulted in a restatement of results, the firing of workers and changes in corporate governance policies.
Dell today also delayed filing its quarterly report as it revises financial results to book the $100 million provision. The reserve anticipates the conclusion of a settlement with the SEC in which Dell G0767 Battery will neither admit nor deny any wrongdoing, Dell’s Frink said.
Dell dropped as much as 4 percent to $12.55 in extended trading, after the announcement. The shares had risen 29 cents to $13.07 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has declined 9 percent this year.
The settlement would “involve alleged violations of negligence-based fraud provisions of the federal securities laws, as well as other non-fraud based provisions,” Dell said in a statement today. The company has also set $100 million aside to settle an existing agency investigation.Discussions relate to the relationship between Dell Latitude X200 Battery, the third-largest computer maker, and Intel, the world’s biggest manufacturer of semiconductors, Dell said without elaborating. The investigation probably concerns the way Dell accounted for chip discounts from Intel over a five-year period through early 2007, said Ashok Kumar, a Rodman & Renshaw Inc. analyst in San Francisco.“There are some gray areas, but I don’t think it’s any egregious or anti-competitive behavior,” said Kumar who rates Dell 8U443 Battery “market perform” and doesn’t own shares. “It’s just aggressive pricing and shouldn’t be taken in any other light.”
Any settlement wouldn’t result in Michael Dell being barred from serving as a director and officer of a public company, according to the filing by the Round Rock, Texas-based company. Talks between SEC staff and the CEO got under way recently.
Report Delayed
SEC spokesman John Nester declined to comment.Dell spokesman David Frink said the company wouldn’t comment further on current investigations. Intel declined to comment, said spokesman Tom Beermann.
Intel’s payments to PC makers have come under scrutiny by regulators who allege the chipmaker used them to dissuade customers from purchasing products from rival Advanced Micro Devices Inc.
Starting in 2005, the SEC began an investigation of Dell’s financial reporting that resulted in a restatement of results, the firing of workers and changes in corporate governance policies.
Dell today also delayed filing its quarterly report as it revises financial results to book the $100 million provision. The reserve anticipates the conclusion of a settlement with the SEC in which Dell G0767 Battery will neither admit nor deny any wrongdoing, Dell’s Frink said.
Dell dropped as much as 4 percent to $12.55 in extended trading, after the announcement. The shares had risen 29 cents to $13.07 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has declined 9 percent this year.
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