Dell, SEC settle: $100 million on allegations of securities laws violations

Dell and SEC reach a settlement agreement over alleged violations of securities laws.

Dell said today that the company, as well as CEO Michael Dell, have reached settlements with the SEC over alleged violations of federal securities law, including anti-fraud provisions related to accounting and financial reporting. (Statement)

The company will pay a $100 million penalty and Michael Dell will personally pay a penalty of $4 million. In addition, the settlement does not include any restrictions on Michael Dell's role as an officer or director of the company.

Dell said last month that it has recorded a $100 million liability in its first quarter 2011 earnings to establish a reserve for the settlement.

In a statement issued today, the company said:

Under its settlement, the company has consented to a permanent injunction against future violations of such federal securities laws and SEC rules. The company also has agreed to perform certain undertakings, including retaining an independent consultant, to enhance its disclosure processes, practices and controls... The SEC’s allegations with respect to Mr. Dell and his settlement are limited to the alleged failure to provide adequate disclosures with respect to the company’s commercial relationship with Intel prior to Fiscal 2008. Mr. Dell’s settlement does not involve any of the separate accounting fraud charges being settled by the company and others. Moreover, Mr. Dell’s settlement is limited to claims in which only negligence, and not fraudulent intent, is required to establish liability, as well as secondary liability claims for other non-fraud charges. Under his settlement, Mr. Dell has consented to a permanent injunction against future violations of these negligence-based provisions and other non-fraud based provisions of certain federal securities laws and SEC rules. In addition, Mr. Dell has agreed to pay a civil monetary penalty of $4 million. The settlement does not include any restrictions on Mr. Dell’s continued service as an officer or director of the company.

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