Dell Settles With SEC For $100 Million, CEO To Pay $4 Million More

The settlement comprises a $100 million civil monetary penalty that the company previously put aside for a settlement, and concludes the investigation with both the company and CEO Michael Dell, according to Dell. In addition, chairman and CEO Michael Dell has agreed to pay a $4 million penalty, according to the company, but will not have to resign as an executive or board member.

As a result of the settlement, neither the company nor Michael Dell admit nor deny any allegations in the SEC’s complaint, which is typical in a settlement. The agreement is subject to approval in U.S. District Court.

The SEC’s complaint against the company alleged that Dell violated federal securities laws and antifraud provisions during the period of 2001 to 2006. Dell has consented to a permanent injunction against future violations as part of the settlement and the company also will perform certain undertakings, including retaining an independent consultant and enhancing its disclosure processes, practices and controls.

The SEC’s allegations against Michael Dell involved the failure to provide adequate disclosure about the vendor’s relationship with Intel prior to 2008. Michael Dell’s settlement does not involve any of the separate accounting fraud charges being settled by the company and others, according to Dell.

Michael Dell also has consented to a permanent injunction against future violations of negligence-based provisions and other non-fraud-based provisions of certain federal securities laws and SEC rules, according to the company. The settlement does not place any restrictions on Michael Dell’s continued service as an officer or director of the company.

In a statement, Michael Dell said, “We are pleased to have resolved this matter. We are committed to maintaining clear and accurate reporting of our periodic results, supporting our customers, and executing our growth strategy.”

Dell’s board of directors offered its “unanimous support” for Michael Dell’s continued leadership, in a statement from the company.

“The board [of directors] believes that this settlement is in the best interest of the company, its customers and its shareholders, as it brings a five-year SEC investigation to closure,” said Sam Nunn, presiding director of Dell’s board, in the statement.