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Dell Settles With the SEC For $100M
Sri.Theo writes in with news of Dell's humbling settlement with the US Securities and Exchange Commission. The core of the complaint is that Dell took secret payments from Intel to keep AMD's chips out of Dell's machines. The SEC calls it "accounting irregularities" — Dell was dipping into this secret slush fund to bolster its results, quarter by quarter. At one point the payments from Intel made up 76% of Dell's quarterly operating income. "For years, Dell's seemingly magical power to squeeze efficiencies out of its supply chain and drive down costs made it a darling of the financial markets. Now it appears that the magic was at least partly the result of a huge financial illusion. ... According to the commission, Dell would have missed analysts' earnings expectations in every quarter between 2002 and 2006 were it not for accounting shenanigans. ... (Intel is expected to settle a long-running anti-trust case that has highlighted these payments in the next couple of weeks.) ... Michael Dell... and Kevin Rollins, a former boss of the company, agreed to each pay a $4m penalty without admitting or denying the SEC's allegations."
Only a $100M fine? Shows that crime _does_ pay time and again..
No, this is white collar crime, which the US frowns upon by making one pay back a small percentage of the damage^h^h^h^h^h^h PROFIT caused by one's actions.
There. Fixed that for you.
I'm really frustrated with settlements. They seem to circumvent several basic principles of justice:
I've heard arguments for settlements such as, "We're not sure we could get a conviction. This lets us get at least a modicum of justice" Well if you're not sure, then maybe you shouldn't be trying to prosecute? It's for a jury to decide what's a just punishment, not the prosecutor.
Or, "It lets us safe the legal expense of prosecuting." Well, if the system is so broken that cases can't be fought within the financial means of the government, then shouldn't it dawn on someone that it's way broken for individual citizens with limited financial resources?
America was founded with some beautiful ideals, but I don't have a lot of respect for those who have evolved its legal practices.
Actually, I think it is worse than that. Management conned shareholders about how efficient the company was, and therefore how much the company could be expected to earn in the future. Who were the victims here: the shareholders. The SEC investigates and now the company has to pay a fine. Whose money pays the fine? The shareholders. Put simply, the victims of this fraud get to pay the fine. Yah! Well done SEC, that will provide a real incentive to stop execs doing this in the future. [Yes, I know that Michael Dell has to pay $4M, but this is a small amount to him -- probably less than the fraud earned him]
The real "Libtards" are the Libertarians!
Uhhhh - troll is trolling, but there is something of a serious question in the troll.
There really IS a big difference in the two statements. There is really no way to measure the damage caused by Dell's actions. If there is a way to measure the damages to AMD as well as the public, it would be a long, involved process that no one wants to invest the time and resources in.
However, it's pretty easy to analyze how much of Dell's profits resulted from this dishonesty.
Personally, I think the fine should be ALL of the ill-gotten profits. If they benefit by ten million, take that ten million, plus a punitive fine. If they profit by 100 million, take that 100 million, plus a punitive fine.
Sorry for feeding the troll, but I thought some reasonable people might need the distinction drawn for them.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
"The company neither admitted nor denied guilt as part of the settlement--a common phraseology in such deals."
How about a big FUCK YOU to Securities and Exchange Commission and the US Department of Justice! How about you dig a little deeper, get the dirt on the direct involvement by Michael Dell and the other board members during the 4-year period and put these schmucks in San Quentin Federal Penitentiary. If you can't find the evidence, just use your powers of Extraordinary Rendition to send a few of these folks over to the Middle East or Africa, a little water boarding, pull of some fingernails and you could get just enough information to find hard evidence to try and convict these people.
I could name a dozen good computer companies who disappeared during this time frame due to Dell's stellar rise in the computer market though shenanigans like this. Good computer companies that produced better products when under because they didn't cook their books like Dell did and didn't take bribes from Intel.
Like another poster said, the pure computer companies that did survive like HP (previously Compaq), Acer, etc. might have been involved in this also.
Intel did just settle the record breaking $1.4 Billion USD to the European Union's commission for violating anti-trust regulations or having to pay $1.2 Billion USD to AMD previously in a similar settlement.
I'm still glad to see that the NY State case against Intel is still on-going and it would be great if other states and companies jump on this bandwagon for lynching Intel since these guys have been playing some dirty games for a long time. Time to hold Execute Officers directly responsible for criminal and immoral decisions directly liable for their actions and orders. Too bad that our government is in the pocket of big corporations and that no real sanctions will be taken against these business scumbags.
Dell's success is now forever clouded by this and I think that looking at their shady little deal with Intel, I wouldn't put it past them if there was one going on right now with Microsoft for operating systems. Dell just did pull Ubuntu Linux OSes computers from their web site just as Linux is getting more acceptance by people due to Google's Android mobile OS success in the mobile market and also the upcoming tablet computer revolution. Microsoft isn't playing in this field and they are scared since they cannot compete.
Why should you, as part owner of the company, be held liable for crimes committed by the company before you owned it?
Simple. BECAUSE YOU OWN THE FUCKING COMPANY.
You buy the company, you buy the liabilities.
Otherwise you're shifting the cost of the crimes of a company from those who own it to those who DON'T own it. How the fuck is that fair?
Now, if the previous owners supported such behavior and you're being stuck with the cost, you go ahead and sue them for that.
You want to treat the owning of a company like a slot machine, then you get to assume all of the TRUE risks instead of shifting them to others.
Then, something strange and unprecedented might happen. People who own a company might not decide to own it only for a month or two, or a day, or 30 seconds.
The owners of a company might take the unusual step of deciding they should learn about what the company does before buying into it. Learning what they make. Learning how they operate, what they DO, what actions they take. People might actually feel like they, as owners of the company, have a STAKE in what the company does, besides a hoped-for quick profit. They might feel a sense of personal... gosh, shall we say investment in the company they own.
Of course, that would mean they would have to devote time and energy to the company, to learning about it, to having a hand in running it, at least in the sense of voting intelligently. And that might mean they would find it necessary to own the company for years even, to get a handle on things. They might find they have to actually be responsible on some level for what the company they own does.
In short, it would have the strange, market-distorting effect of making the owners of the company act like OWNERS of a fucking COMPANY.
I realize this is a groundbreaking, alien concept. Holding the people responsible for a company responsible for that company? Insane!
Why, our very way of life would be radically altered.
This space available.
Why should you, as part owner of the company, be held liable for crimes committed by the company before you owned it?
Simple. BECAUSE YOU OWN THE FUCKING COMPANY.
You buy the company, you buy the liabilities.
Otherwise you're shifting the cost of the crimes of a company from those who own it to those who DON'T own it. How the fuck is that fair?
I agree with you 100%.
I just want to emphasize: companies don't commit crimes, people do. If "the company" knew of the crime being committed and didn't take action, yes, "the company" is liable and owners do need to be held responsible.
The perps themselves need to also pay (either a fine or jail time depending on the crime). Bernie Madoff and his ilk are great examples (I'm pleased that they sent his software developers to jail too. They were some of his biggest enablers). This may be where RajivSLK was coming from, but he didn't articulate it.
I bring this up for 2 reasons:
1. In our rage at "company behavior", we sometimes forget about the people, which is at least as important
2. If Michael Dell and Kevin Rollins (a former boss) are personally being made to pay up, that means that, aside from Dell being liable, they personally perpetrated crimes (possibly.....rant on SEC below).
This is my big beef with the SEC. We should actually enforce our fraud laws and when someone is accused of committing fraud, have a real investigation and possibly some arrests, not have the SEC come in, say that there's "accounting irregularities" and slap a person on the wrist with a puny fine. Half the time the SEC is in cahoots with these companies/people and are committing crimes themselves.