Dell stock regained ground on July 23 after it agreed to pay $100 million in fines to resolve charges it used payments from Intel to mislead investors about the company's performance. Dell's stock price dipped after the settlement was announced but had climbed to $13.47 as the New York Stock Exchange neared the close of trading on July 23.
The U.S. Securities and Exchange Commission (SEC) said Dell accepted money from Intel in exchange for not using chips made by rival maker Advanced Micro Devices.
The regulatory body said Dell then used to payments to make it appear it was meeting Wall Street earnings targets.
"It was these payments rather than the company's management and operations that allowed Dell to meet its earnings targets," the SEC said.
"After Intel cut these payments, Dell again misled investors by not disclosing the true reason behind the company's decreased profitability."
Dell CEO Michael Dell and former chief executive Kevin Rollins each agreed to pay $4 million for their roles between 2001 and 2006. A former chief financial officer at the Texas-based company will pay $3 million, according to the SEC.
"Accuracy and completeness are the touchstones of public company disclosure under the federal securities laws," SEC division of enforcement director Robert Khuzami said on July 22. "Michael Dell and other senior Dell executives fell short of that standard repeatedly over many years, and today they are held accountable."
The settlement ends a five-year SEC investigation into aspects of Dell's business relationship with Intel, according to Dell board director Sam Nunn.
He said that the board of directors unanimously supports Michael Dell remaining as chief executive. "We are pleased to have resolved this matter," Michael Dell said. "We are committed to maintaining clear and accurate reporting of our periodic results, supporting our customers, and executing our growth strategy."
Copyright Agence France-Presse, 2010
