In March 2006, it was reported that Dell’s board uncovered evidence of misconduct, including accounting errors and “deficiencies in the financial control environment,” while conducting an ongoing investigation of the company’s accounting. The board’s investigation was prompted by a Securities and Exchange Commission inquiry that began in August 2005. In August 2007, Dell announced it would restate four years of financial results (fiscal years 2003-2006 and the first fiscal quarter of 2007) after a separate internal audit found that senior executives sought accounting adjustments “motivated by the objective of attaining financial targets.” According to Dell, “a number of these adjustments were improper,” and “[t]he investigation found that sometimes business unit personnel did not provide complete information to corporate headquarters and, in a number of instances, purposefully incorrect or incomplete information about these activities was provided to internal or external auditors.” In July 2010, Dell agreed to pay $100 million to resolve the SEC investigation. The settlement also resolved allegations that Dell misrepresented aspects of its commercial relationship with Intel Corp. In addition, Dell CEO Michael Dell and former CEO Kevin Rollins each agreed to pay a $4 million civil penalty; former CFO James Schneider agreed to pay a $3 million penalty plus over $121,000 in disgorgement and interest; and former regional vice president of finance Nicholas Dunning agreed to pay a $50,000 penalty. The company and the individual executives settled without admitting or denying SEC’s allegations.
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