Dell Inc. agreed to pay $100 million and Chief Executive Michael Dell will pay an additional $4 million to settle U.S. regulatory claims that the company used fraudulent accounting to meet earnings targets.
The computer maker and its founder failed to tell investors about "exclusivity payments" received from Intel Corp. in exchange for not using products made by the chipmaker's main rival, the Securities and Exchange Commission said Thursday. Those payments allowed Dell to reach its earnings targets from 2001 to 2006, the SEC said.
"Accuracy and completeness are the touchstones of public-company disclosure under the federal securities laws," SEC enforcement chief Robert Khuzami said in the agency's statement. "Michael Dell and other senior Dell executives fell short of that standard repeatedly over many years, and today they are held accountable."
Former CEO Kevin Rollins and James Schneider, the company's former chief financial officer, agreed to pay fines of $4 million and $3 million, respectively. Dell and the executives neither admitted nor denied the allegations in settling the case.
"We're pleased to have reached this final settlement with the SEC and to be able to focus all our efforts on helping our customers succeed," Dell spokesman David Frink said.
Calls to the executives' attorneys for comment were not immediately returned.