Box-shifter Dell seems to spend more time defending itself in court than making PCs these days. The company has just assured the US Government that it will be a good boy and improve its accounting and corporate governance methods.
But the company is very firmly on the naughty step and has been ordered to cough up $1.75 million in legal costs following a three year SEC investigation into its accounting practices. The SEC ruled that between 2003 and 2007, Dell had exaggerated sales by $359 million and its profits by $92 million.
The Securities and Exchange Commission started a probe into Dell’s accounting procedures back in 2006, after shareholders complained that the outfit’s management and board members sold stock at inflated prices while misrepresenting the company’s actual financial health. Dell still denies any wrongdoing on the insider trading front.
Dell also agreed that, in future, a minimum of 60 percent of its board would come from outside the company. Over the next four years, the company will establish an accounting code of conduct and provide improved ethics, compliance and insider-trading training for its directors – presumably to help them avoid doing it rather than becoming more accomplished.
It also promises to set up a global accounting team to keep an eye on finances, together with a mechanism enabling employees to blow the whistle on any shady dealings anonymously.