Wolverhampton sues Dell, Intel, Price Waterhouse Coopers

A COMPLAINT made under the Securities Exchange Act of 1934 names Dell, Intel, Price Waterhouse Cooper and a heap of individuals as co-defendants.

The allegation is that Dell Direct promised 15 per cent plus profitable growth at a time when other PC firms were showing slower demand. Presumably Wolverhampton City Council is complaining because as the trustee of a big West Midlands pension fund, it is disappointed with the performance of the Dell shares. It's alleged Dell falsified financial reports and artificially inflated its share price.

"As Dell's stock moved higher during the class period, the Dell insiders' stock options... became worth billions of dollars. Dell's insiders took advantage of this artificial inflation in Dell's stock price, selling off an enormous amount of their Dell stock, nearly 99 million shares, for illegal insider trading proceeds of $3.3 billion." This, the lawyers allege, is the "largest insider bail out in the history of any US public company."

The lawyers produce this chart as part of the allegations.

Wolverhampton City Council, which looks after the West Midlands Metropolitan Authorities Pension Fund, bought Dell stock at artificially inflated prices and was damaged by that, it alleged.

There are 252 pages in the filing, made in an Austin district court. It's really more of a book than a filing, isn't it?

Intel is lumped into the case because it was Dell's sole supplier of CPUs, while PWC is there because it was the outside auditor and, it's alleged, should have noticed shenanigans going on. µ