Dell to restate earnings due to accounting fraud

From CNET News.com: As a result of the federal investigation of accounting fraud at Dell, the PC maker said Thursday it will take a $100 million charge on its first quarter 2011 earnings.

Dell and the Securities and Exchange Commission agreed on a settlement, which includes the liability payment and a civil injunctive action against the company. It's a result of Dell's violation of federal securities laws related to its accounting practices and a separate investigation into its relationship with Intel. The $100 million payment will establish a reserve as the SEC and Dell work out the final tally of fines the PC maker will pay.

Chairman and CEO Michael Dell and the SEC are discussing a separate settlement relating to the Intel relationship. Intel was sued by the New York Attorney General's Office for paying computer makers, including Dell, rebates to illegally maintain monopoly power in the chip market and prevent AMD from gaining business with PC makers. While the details of the settlement with Michael Dell were not disclosed, it will not require him to admit to any wrongdoing or step down as an officer of the company he founded.

After a lengthy internal investigation, Dell admitted in August 2007 that between 2003 and 2006, its accounting department was fudging quarterly numbers to meet Wall Street analyst's financial forecasts. The company was forced to restate its earnings during that time period, which lowered its total earnings during that time by $50 million to $150 million.

View: Article @ Source Site