Senior executives at Dell and their defense attorneys today defended the $100 million settlement with the U.S. Securities and Exchange Commission for improper accounting and disclosure violations, telling a federal judge in Washington that the deal was in the best interest of the company and its shareholders.
Dell chairman and chief executive officer Michael Dell said in a brief statement to the court that the company is committed to implementing the settlement with the SEC. Michael Dell, represented by Wachtel, Lipton, Rosen & Katz partner John Savarese, said he is confident with the team of legal, accounting and compliance professionals in place at the company.
The SEC filed suit in July, naming Dell and five executives, including Dell and former chief financial officer James Schneider. Click here for the complaint.
Skadden, Arps, Slate, Meagher & Flom partner David Zornow, a lead attorney for the company at today’s hearing, called the settlement the result of “rigorous negotiations” and “careful deliberation” at Dell. “Dell has chosen to put this matter behind it,” Zornow said.
Dell general counsel Larry Tu said today in court the company wanted to avoid the cost, risk and uncertainty associated with protracted litigation. Dell did not admit fault in the settlement. The company, however, cannot deny the allegations. Debevoise & Plimpton partner W. Neil Eggleston represented Schneider at the hearing today.
SEC attorneys, led by John Worland Jr., alleged in court papers that improper accounting between 2001 and 2006 made it appear Dell was meeting Wall Street earnings targets. SEC lawyers said in the complaint that Dell’s disclosure violations stem from the receipt of large payments from Intel Corporation and “fraudulently misrepresented the basis for Dell’s improving profitability.”
Worland, a senior SEC enforcement division attorney, called the Dell settlement an “outstanding example” of regulatory enforcement that is the product of an extensive investigation.
Judge Richard Leon of the U.S. District Court for the District of Columbia, who presided over the hearing, approved the settlement.