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     Dma Side Hero Username: Dma Post Number: 8031 Registered: 11-2009 Posted From: 70.176.175.214 Rating: N/A |
Investigations and Lawsuits The company's troubles with the S.E.C. began in 2005, when the agency began looking into Dell's accounting practices. The S.E.C. had accused Dell of misleading investors by using money the company received from the chip maker Intel to pad its quarterly earnings statements. Company executives, according to the agency, relied on the payments from Intel to meet or surpass Wall Street's expectations. The investigation led to admissions of misconduct by Dell and prompted the company to restate financial results from 2003 to the first quarter of 2007. It also resulted in Dell's $100 million settlement with the S.E.C. Later allegations said that Dell and its founder and chief executive, Michael S. Dell, had engaged in financial irregularities related to the company's dealings with Intel. The relationship between Dell and Intel had come under scrutiny in an antitrust lawsuit filed in November 2009 by Andrew M. Cuomo, then New York's attorney general, against Intel. In that suit, Intel, the world's largest chip maker, was accused of using rebates and co-marketing arrangements as bribes to persuade Dell and other manufacturers to use its products in computers and servers rather than switching to lower-cost chips from its rival, Advanced Micro Devices. Intel denied the allegations. After Dell's troubles with the S.E.C. began, the company stock lost about two-thirds of its value. In 2003 and 2004, Advanced Internet Technologies, an Internet services company, brought a lawsuit against Dell, accusing the company of selling at least 11.8 million faulty PCs and then trying to hide problems from customers. A.I.T. said it lost business as a result of the broken Dell machines. The problems affecting the Dell computers stemmed from bad capacitors produced by Asian PC component suppliers. Capacitors are found on computer motherboards, playing a crucial role in the flow of current across the hardware. A contractor hired by Dell to investigate the situation found that the company replaced faulty motherboards with other faulty motherboards. And Dell employees went out of their way to conceal the problems. In 2005, it announced it was taking a $300 million charge related, in part, to fixing and replacing the troubled computers. But, as Dell did not recall the computers, many customers were unaware that they had problematic computers or did not realize why their computers broke. A.I.T. said in court documents that the faulty capacitors touched off a variety of other problems that were often misdiagnosed. In June 2010, documents unsealed in the lawsuit showed that the company's employees were aware that millions of its desktop PCs sold from 2003 to 2005 were likely to break down. A later filing asserted that Dell had concealed evidence by providing only a snippet of the communications among top executives about the faulty computer problems. | ||
| Dma Side Hero Username: Dma Post Number: 8029 Registered: 11-2009 Posted From: 70.176.175.214 Rating: N/A |
- What are the benefits to the company? - What does it mean to the consumers? |
