Once-mighty Dell said it has removed $100 million from its reported first quarter profit in case the U.S. Securities and Exchange Commission (SEC) throws the book at it.
In a statement, Dell said that, "as a result of on-going discussions with the staff of the SEC, the company recorded a $100 million liability in its first quarter of Fiscal 2011 to establish a reserve for the potential settlement by the company of the previously reported SEC investigation."
If that sounds serious, it's because it is.
The settlement would involve "a civil injunctive action against the company for alleged violations of certain federal securities laws, including the anti-fraud provisions of federal securities laws, relating to certain accounting and financial reporting matters."
According to the statement, a settlement might include "negligence-based fraud charges, as well as other non-fraud based charges, relating to the company’s disclosures and alleged omissions prior to Fiscal 2008 regarding certain aspects of its commercial relationship with Intel Corp."
The SEC is also having a quiet word with Dell chairman and CEO Mikey Dell,over "disclosures and alleged omissions prior to Fiscal 2008 regarding certain aspects of the company’s commercial relationship with Intel Corp."
It looks like Dell will hold his hands to shenanigans in exchange for not being barred from running the dodgy outfit.
But: "Any settlement would be made without admitting or denying the SEC’s allegations," the statement reads.
That's the sort of pronouncement you can only make if you have $100 million stuffed down the back of the sofa, which you can produce in a flash when people asking questions you don't want to answer.
“We are hopeful that these settlement discussions will achieve a comprehensive resolution in the near future. The independent directors of the Board have affirmed that Michael Dell will continue to lead the company as its chairman and CEO, and he continues to have our complete confidence and support” said Sam Nunn, presiding director of the Dell Board.