Dell, SEC Near Settlement In Accounting Investigation

The Round Rock, Texas-based vendor said the company, and Chairman and CEO Michael Dell, have proposed settlements to the SEC that the SEC staff has agreed to recommend. The SEC and a U.S. District Court have yet to approve the settlements, according to Dell.

Last month, Dell notified the SEC that it revised its April quarter earnings to reflect a $100 million liability “for the potential settlement of the SEC investigation.”

In March, Dell said it had completed its own investigation, but noted that the SEC’s investigation was still active and Dell expected to incur monetary penalties “which cannot be quantified at this time, and other relief within the SEC’s authority,” according to the filing. “No assurance can be given as to the ultimate outcome of this matter, including the terms and conditions of any settlement.”

The SEC investigation began in August 2005 and was expanded in June 2006 to include Dell’s accounting and financial reporting from 2001 to 2005.

In April, Dell said that several former Dell employees had been contacted by the SEC and told they should expect to see civil or administrative action taken against them, according to an SEC filing by the company.

The former employees, whom Dell did not name in the filing, have received Wells notices, which is a preliminary decision by the SEC recommending civil or administrative action. "It is possible that other individuals have received or will receive such notices," according to the filing.