A man is known by his friends, the devil is known by his fiends
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Dell is in deep kimchee with the SEC
TINMAN Michael Dell is up to his armpits with the US Securities and Exchange Commission (SEC) over allegations that he might have engaged in financial irregularities with Intel.
According to the New York Times, the company is at the "settlement stage" in an enforcement action about its founder and chief executive, Michael Dell's dealings with Intel in past years. Apparently the company will pay a fine and there won't be sanctions that might prevent Dell from being an officer or director of a publicly held company.
A settlement might be made without admitting or denying the commission's allegations. We guess it is just a matter of writing a big enough cheque to make the SEC go away.
The allegations relate to how Dell accounted for payments and rebates that it had received from Intel. There is nothing criminal about it all, apparently. Dell has set aside $100 million for a possible settlement of the SEC action.
The SEC started having a look at Dell's books in 2005 and began a formal inquiry in 2006. There were admissions of misconduct by Dell that prompted the computer maker to restate financial results from 2003 through the first quarter of 2007.
Dell's close relationship with Chipzilla was questioned during an antitrust lawsuit filed in November by Andrew Cuomo, the New York state attorney general, against Intel.
In that case, Chipzilla was accused of using rebates and co-marketing arrangements as bribes to persuade Dell and other manufacturers to use its chips instead of AMD's.
Intel also paid AMD about $4 billion to settle a civil antitrust lawsuit last year, so Dell might be getting off a bit easy at just $100 million. µ
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For some more info about Dell Inc.'s possible violation of Texas anti-laws, readers might want to check out an article that was recently posted the Austin-based Rag Blog site at following link:
http://theragblog.blogspot.com/2010/06/michael-dell-did-he-violate-texas.html
Nick,
Your article states that intel paid AMD about $4bn to settle the civil claim filed by AMD.
My question is, is today make up your own facts day? or did intel cough up another $2.75bn the rest of us arent aware of?
This quote from another artical,"Dell and the Securities and Exchange Commission agreed on a settlement it will not require Dell to admit to any wrongdoing." One law for the wealthy and one law for the poor. Only the wealthy can get charged, admit to no wrong doing but have to put aside 100$ million once they figure out what their no wrong doing is worth.Then at the end of their fiscal year write it off as a business expense which in a round about way the tax payers pay for his no wrong doing. Have to keep pushing my kids through University, so they eventually can do no wrong.
The real target here is Intel. Dell is playing their cards intelligently by being the first to settle and spilling their guts to the DOJ. The first cooperating witness gets either a free pass or in this case a slap on the wrist comparatively for their transgressions. Dell will be able to provide the evidence to sink Intel's ship under the False Claims Act on benchmarks used to sell computers made by Dell and others(think HP)to federally funded programs like schools research institutions, and even government agencies. The claims under section 10 of the FTC complaint are now dead certain with Mike Dell's testimony and the research conducted by Lawrence Berkeley National Lab.
Should DOJ seek criminal enforcement of the False Claims Act or Antitrust laws, the case can be tried in the Western District of Texas by naming Dell as an unindicted co-conspirator. Since AMD has a plant in Austin, DOJ would have the opportunity to move the case to Del Rio. That is the worst location I can imagine for suits from Intel to have to defend their conduct. I spent 9 years on the Federal Public Defender's A Panel in the Western District of Texas and cannot imagine a worse place for white collar criminals to be tried. The IRS uses the Austin Service Center, where tax returns for Louisiana, Mississippi, Tennessee and Kentucky are filed, as a basis for jurisdiction and venue to try criminal tax cases from those states. They can try the case in any district where any part of the crime is committed and forum shopping is a regular feature.
As for HP, I would be in the local US Attorney's office on Monday spilling my guts about the use of phony benchmarks. I don't think that they have the antitrust issues Dell has since HP and Compaq offered AMD processors all along.
Dell in financial irregularities with Intel? Shirley, there's some mistake! No two finer tech companies exist.
/sarcasm